Reference no: EM132571560
De La Vega Company has three product lines of natural wigs: A, B, and C, with contribution margins of $28, $20, and $16, respectively. The president foresees sales of 1,800,000 units in the coming period, consisting of 250,000 units of A, 850,000 units of B, and 700,000 units of C. The company's fixed costs for the period are $9,680,000.
Required:
Question 1. What is the company's breakeven point in units of each product line assuming that the given sales mix is maintained?
Question 2. If the sales mix is maintained, what is the total contribution margin when 1,440,000 units are sold? What is the operating income?
Question 3. What is the Tax Rate that De la Vega company is subject to if the current sales mix prevails and De La Vega needs to sell a total of 1,860,000 units to reach its Target Operating Profit of $16,020,960.
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