The Coughlin Company retails twoâ products: a standard and a deluxe version of a luggage carrier. The budgeted income statement for next period is asâ follows: Standard Carrier Deluxe carrier Total
Units sold 187,500 62,500 250,000
Revenues at $28 and $50 per unit 5250000 3125000 8375000
Variable costs at $18 and $3 per unit 3375000 1875000 5250000
Contribution margins at $10 and $20 per unit 1875000 1250000 3125000
Fixed costs 2250000
Operating income 875,000

Requirement:
a. Compute the breakeven point inâ units, assuming that the company achieves its planned sales mix.
b. Compute the breakeven point in units (a) if only standard carriers are sold and (b) if only deluxe carriers are sold.
c. Suppose 250,000 units are sold but only 50,000 of them are deluxe. Compute the operating income. Compute the breakeven point in units.