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Hogtown Manufacturing Company produces the following three products: Saws, Knives, Measuring Tapes
Saws Knives Measuring Tapes
Selling price per unit $ 40.00 $ 16.00 $ 50.00Variable costs per unit 28.00 12.00 30.00
The company has $76,000 of fixed costs and, on average, its sales have the following ratio: 4 saws, 3 knives and 2 measuring tapes.
a. What is the number of units of each product that must be sold for Hogtown to achieve its breakeven point:Break-even point units Saws Knives Tapes
b. What would be the effect on the firm's breakeven point if the sales ratio changes to 2 saws, 3 knives and 4 measuring Tapes? Briefly explain your answer.
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