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Problem - Special Cost-Volume-Profit Relationships - Blueberry Inc., a consumer electronics company, manufactures and sells two products, smartphones and tablet computers. The unit selling price, unit variable cost, and sales mix for each product are as follows:
Products
Unit Selling Price
Unit Variable Cost
Sales Mix
Smartphone
$650
$560
60%
Tablet
550
475
40%
The company's fixed costs are $4,200,000.
Required -
a. How many units of each product would be sold at the break-even point?
b1. Assume Blueberry sells 37,500 smartphones and 25,000 tablets during a recent year. Compute the company's (1) operating leverage.
b2. Assume Blueberry sells 37,500 smartphones and 25,000 tablets during a recent year. Compute the company's (2) margin of safety.
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