The following information is for Barnett Corporation: Product X:Revenue per unit

Question

The following information is for Barnett Corporation:

Product X:Revenue per unit       $10,000

         Variable cost                              2.50

Product Y:Revenue                      $15.00

          Variable cost                            5.00

1.  For Barnette Corporation, what is the breakeven point assuming the sale mix consists of two units of Product X and one unit of Product Y

2.  What is Barnett Corporation's operating income, assuming the actual sales total 150,000 units assuming the same sales mix as above: two units of Product X and one unit of Product Y.

Explanation / Answer

1)

7.5x+10y=50000

x/y = 2

x = 2y

15y+10y = 50000

25y = 50000

y = 2000

x = 4000

2)

150000 unit

x = 100000 and y = 50000

income=7.5*100000+10*50000-50000

income = 1200000

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