The Pawlak company has three product lines of belts- A, B, and C- with contribution margins of $3, $2, and $1, respectively. The president foresees sales of 320000 units in the coming period, consisting of 32000 units of A, 160000 units of B, and 128000 units of C. The company's fixed costs for the period are $272000.
Requirements
1. What is the company's breakeven point in units, assuming that the given sales mix is maintained?
2. If the sales mix is maintained, what is the total contribution margin when 320000 units are sold? What is the operating income?
3. What would operating income be if 32000 units of A, 128000 units of B, and 160000 units of C were sold? What is the new breakeven point in units if these relationships persist in the next period?