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What is the break-even sales volume

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Reference no: EM13861058

Thomlinson Company is considering the development of two products: no. 765 or no. 766. Manufacturing cost information follows.

 

No. 765

NO. 766

Annual Fixed Costs

$250,000

$350,000

Variable cost per unit

$35

$25

Regardless of which product is introduced, the anticipated selling price will be $60 and the company will pay a 10% sales commission on gross dollar sales. Thomlinson will not carry an inventory of these items.

A. What is the break-even sales volume (in dollars) on product no. 766?

B. Which of the two products will be more profitable at a sales level of 20,000 units?

C. At what unit-volume level will the profit/loss on product no. 765 equal the profit/loss on product no. 766?

Reference no: EM13861058

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