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    Units to be sold

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    MuNu Ltd. manufactures three different products - Oceanus, Tethys and Themis - with the sales mix having remained relatively constant over the past few years.

    Financial results for the past year are:

    Product # of Units Sold Selling Price per Unit Variable Cost per Unit

    Oceanus 95,000 $15 $8
    Tethys 133,000 $22.50 $9.50
    Themis 152,000 $28 $12.50

    Fixed costs are $1,565,000 per period; and the corporate tax rate is 40%. Given the sales mix, how many units of Product Themis must be sold in order to achieve an operating income of $450,000?

    a. 58,720
    b. 64,480
    c. 74,080
    d. 161,200
    e. 260,845

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    We first calculate the weighted average contribution margin
    This comes to ...

    Solution Summary

    The solution explains how to determine the number of units to sold to generate the desired operating income