Question

Most businesses sell several products at varying prices. The products often have different unit variable costs. Thus, the total profit and the breakeven point depend on the proportions in which the products are sold. Sales mix is the relative contribution of sales among various products sold by a firm. Assume that the sales of Jordan Incorporated for a typical year are as follows: ProductUnits SoldSales MixA18,28880%B4,57220Total22,860100% Assume the following unit selling prices and unit variable costs: ProductSelling PriceVariable CostContribution MarginA$ 89$ 74$ 15B14910940 Fixed costs are $418,000 per year. Assume that the sales mix, expressed in terms of relative physical units sold, is constant as sales volume changes.

          Most businesses sell several products at varying prices. The products often have different unit variable costs. Thus, the total profit and the breakeven point depend on the proportions in which the products are sold. Sales mix is the relative contribution of sales among various products sold by a firm. Assume that the sales of Jordan Incorporated for a typical year are as follows:
ProductUnits SoldSales MixA18,28880%B4,57220Total22,860100%
Assume the following unit selling prices and unit variable costs:
ProductSelling PriceVariable CostContribution MarginA$ 89$ 74$ 15B14910940
Fixed costs are $418,000 per year. Assume that the sales mix, expressed in terms of relative physical units sold, is constant as sales volume changes.

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