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2. Franklin Company produces two products. Budgeted annual income statements for the two products are provided here:
| | Power | | Lite | | Total |
| | Budgeted | Per | | Budgeted | | Budgeted | Per | | Budgeted | | Budgeted | Budgeted |
| | Number | Unit | | Amount | | Number | Unit | | Amount | | Number | Amount |
| Sales | 100 | @ | $ | 600 | | = | $ | 60,000 | | | 900 | @ | $ | 560 | | = | $ | 504,000 | | | 1,000 | $ | 564,000 | |
| Variable cost | 100 | @ | | 320 | | = | | (32,000 | ) | | 900 | @ | | 430 | | = | | (387,000 | ) | | 1,000 | | (419,000 | ) |
| Contribution margin | 100 | @ | | 280 | | = | | 28,000 | | | 900 | @ | | 130 | | = | | 117,000 | | | 1,000 | | 145,000 | |
| Fixed cost | | | | | | | | (11,000 | ) | | | | | | | | | (90,500 | ) | | | | (101,500 | ) |
| Net income | | | | | | | $ | 17,000 | | | | | | | | | $ | 26,500 | | | | $ | 43,500 | |
| |
Required:
Calculate the break-even point in total number of units.
Determine the number of units of each product Franklin must sell to break even.
A.
Calculate the break-even point in total number of units.
B.
Determine the number of units of each product Franklin must sell to break even.
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| | | | | Required sales for Power | | units | | Required sales for Lite | | units | |
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