Answer 1

X Y Z
Sales Mix 5 3 2
Price($/unit) $ 550.00 $ 450.00 $ 350.00
Variable Cost($/unit) $ 350.00 $ 200.00 $ 180.00
Fixed Cost $ 250,000.00
Target Profit $ 200,000.00

UCM $ 200.00 $ 250.00 $ 170.00

Composite Price $ 4,800.00
Composite Variable Cost $ 2,710.00
Composite UCM $ 2,090.00
Composite BEQ 119.62
Composite TQ 215.31

X Y Z
Break Even Output(BEQ) 598.1 358.9 239.2
CMR 0.4 0.6 0.5
Break Even Sales(BES) 328,947.4 161,483.3 83,732.1
Target Output(TQ) 1,076.6 645.9 430.6
Target Sales(TS) 592,105.3 290,669.9 150,717.7

Income Statement for Varification (BEQ)

X Y Z Total
Sales $ 328,947.37 $ 161,483.25 $ 83,732.06 $ 574,162.68
Variable Cost $ 209,330.14 $ 71,770.33 $ 43,062.20 $ 324,162.68
TCM $ 250,000.00
FC $ 250,000.00
Profit $ -

Income Statement for verification (TQ)

X Y Z Total
Sales $ 592,105.26 $ 290,669.86 $ 150,717.70 $ 1,033,492.82
Variable Cost $ 376,794.26 $ 129,186.60 $ 77,511.96 $ 583,492.82
TCM $ 450,000.00
FC $ 250,000.00
Profit Target $ 200,000.00
 Answer 2

Price($/unit) 550
Variable Cost($/unit) 350
Fixed Cost $ 250,000.00
Target Profit $ 200,000.00

UCM 200.0
CMR 0.4
Break Even Output(BEQ) 1,250.0
Break Even Sales(BES) 687,500.0
Target Output(TQ) 2,250.0

Income Statement for Verification

Sales $ 1,237,500.00
Variable Cost $ 787,500.00
TCM $ 450,000.00
FC $ 250,000.00
Profit Target $ 200,000.00

Yes the firm is profitable at Q=10,000

because, the BEQ=1,250
Yes the firm will achive its profit target at
Q=10,000 because, TQ=2,250