Fortune Tools produces and sells two products. Data concerning these products for the most recent month appear below:
$$\begin{array} { l r r }
& \text { Product XYZ } & \text { Product VAR } \
\text { Sales } & \$ 14,000 & \$ 27,000 \
\text { Variable costs } & \$ 6,720 & \$ 12,550
\end{array}$$
Fixed costs for the entire company were $17,570.
Required:
a. Determine the overall break-even point for the company.
b. If the sales mix shifts toward Product XYZ, with no change in total sales, what will happen to the break-even point for the company? Explain.

Question

Fortune Tools produces and sells two products. Data concerning these products for the most recent month appear below:
 $$\begin{array} { l r r } 
& \text { Product XYZ } & \text { Product VAR } \
\text { Sales } & \$ 14,000 & \$ 27,000 \
\text { Variable costs } & \$ 6,720 & \$ 12,550
\end{array}$$ 
Fixed costs for the entire company were $17,570.
Required:
a. Determine the overall break-even point for the company.
b. If the sales mix shifts toward Product XYZ, with no change in total sales, what will happen to the break-even point for the company? Explain.

Quizplus · Accepted Answer

The Answer of Fortune Tools produces and sells two products. Data concerning these products for the most recent month appear below:
 $$\begin{array} { l r r } 
& \text { Product XYZ } & \text { Product VAR } \
\text { Sales } & \$ 14,000 & \$ 27,000 \
\text { Variable costs } & \$ 6,720 & \$ 12,550
\end{array}$$ 
Fixed costs for the entire company were $17,570.
Required:
a. Determine the overall break-even point for the company.
b. If the sales mix shifts toward Product XYZ, with no change in total sales, what will happen to the break-even point for the company? Explain.

Fortune Tools Produces and Sells Two Products Fixed Costs for the Entire Company Were $17,570