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A company sells two Products: Product A and Product B. Contribution margin per unit is...

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Accounting

A company sells two Products: Product A and Product B. Contribution margin per unit is $20 for Product A and $40 for Product B. Fixed costs are $40,000 per year. The usual sales mix is three units of Product A for every one unit of Product B (A:B, 3:1). Assuming the usual sales mix, determine the total number of units that must be sold to earn annual operating income of $80,000.

a. 1,600 b. 2,000 c. 4,000 d. 4,800 e. none of the above

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