Chartz 1-2-3 is a top selling electronic spread sheet product. Chartz is about to release...
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Chartz 1-2-3 is a top selling electronic spread sheet product. Chartz is about to release version 5.0. It divides its customers into two group: new customers and upgrade customers. Although the same physical product is provided to each customer group, sizable difference exist in selling price and variable marketing costs: New Customers $195 Upgrade Customers $115 $15 Selling Price Variable costs: Manufacturing Marketing Contribution Margin 50 The fixed costs of Chartz 1-2-3 5.0 are $16,500,000. The planned sale mix in unit is %60 new customer and 40% upgrade customers. 1. What is Chartz 1-2-3 5.0 break even point in units, assuming that the planned 60% and 40% sale mix is attained? If the sales mix is attained, what is the operating income when 170,000 total units are sold? 3. Show how the break even points in units changes with the following customer mixes: a. New 40% and upgrade 60% b. New 80% and upgrade 20%
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