On-the-Go, Inc., produces two models of traveling cases for laptop computers—the Programmer and the Executive. The bags have the following characteristics.     Programmer Executive Selling price per bag $ 70   $ 100   Variable cost per bag $ 30   $ 40   Expected sales (bags) per year   8,000     12,000     The total fixed costs per year for the company are $819,000.   Required: a. What is the anticipated level of profits for the expected sales volumes? b. Assuming that the product mix is the same at the break-even point, compute the break-even point. c. If the product sales mix were to change to nine Programmer-style bags for each Executive-style bag, what would be the new break-even volume for On-the-Go?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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On-the-Go, Inc., produces two models of traveling cases for laptop computers—the Programmer and the Executive. The bags have the following characteristics.

 

  Programmer Executive
Selling price per bag $ 70   $ 100  
Variable cost per bag $ 30   $ 40  
Expected sales (bags) per year   8,000     12,000  
 


The total fixed costs per year for the company are $819,000.

 

Required:

a. What is the anticipated level of profits for the expected sales volumes?

b. Assuming that the product mix is the same at the break-even point, compute the break-even point.

c. If the product sales mix were to change to nine Programmer-style bags for each Executive-style bag, what would be the new break-even volume for On-the-Go?

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