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Penury Company offers two products. At present, the

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lt;p>Penury Company offers two products. At present, the following represents the usual results of a month's operations:<br />                                                          Product K Product L</p><p>                                            Amount    Per Unit   Amount  Per Unit   Combined Amount <br />Sales revenue.................       $120,000    $1.20     $80,000      $.80        $200,000<br />Variable expenses............         <u> 60,000</u>     <u> 0.60</u>       <u>60,000</u>      <u>0.60</u>         <u>120,000</u><br />Contribution margin.........          $60,000     $0.60     $20,000    $0.20         80,000<br />Fixed expenses .............                                                                            <u>$50,000</u><br />Net operating income......                                                                           $30,000</p><p>Required:<br />a. Find the break-even point in terms of dollars.<br />b. How many dollars of product K are sold at breakeven?<br />c. The company is considering decreasing product K's unit sales to 80,000 and increasing product L's unit sales to 180,000. Would you advise adopting this plan? Explain.</p>
Submitted: 6 years ago.
Category: Homework
Expert:  Linda_us replied 6 years ago.

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