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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Solution Summary
The solution explains how to determine the number of units to sold to generate the desired operating income
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We first calculate the weighted average contribution margin
This comes to ...
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