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On-the-Go, Inc., produces two models of traveling cases for laptop computersthe Programmerand the Executive. The...

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Accounting

On-the-Go, Inc., produces two models of traveling cases for laptop computersthe Programmerand the Executive. The bags have the following characteristics.

Programmer

Selling price per bag $70

Executive

Selling price per bag $90

Programmer

Variable cost per bag - $40

Executive

Variable cost per bag - $30

Programmer

Expected sales (bags) per year - $7000

Executive

Expected sales (bags) per year- $10,500

The total fixed costs per year for the company are $672,000.

Required:

a.What is the anticipated level of profits for the expected sales volumes?

b.Assuming that the product mix is the same at the break-even point, compute the break-even point.

c.If the product sales mix were to change to nine Programmer-style bags for each Executive-style bag, what would be the new break-even volume for On-the-Go?

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