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The sales manager of Jorgensen Sales will be making different versions of their products. The sales department fells that 70% of units sold will be original product, 20% will be new model #1 and the remainder will be new model #2.
Original. Model1. Model2
Sales price
Per unit. $50 $35 $25
Materials cost. 22.50 15 10
Direct Labor. 10 7.50 5
Variable over head 7 5.25 3.50
(A) determine the number of units of each product that would be sold at the break-even point.
(B) determine the breakeven point if the sales estimates are instead 50% original product, 30% model #1, and the remainder model #2.
Manufacturing overhead is a pool of indirect production costs that must somehow be attached to each unit manufactured.
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