Author Question: Stella Company sells only two products, Product A and Product B. Product AProduct BTotalSelling ... (Read 193 times)

jeatrice · **on:** Mar 6, 2021

Question 1

In multiproduct situations, when sales mix shifts toward the product with the lowest contribution margin then ________.
◦ total revenues will increase
◦ interest cost will decrease
◦ total contribution margin will increase
◦ operating income will decrease

Question 2

Stella Company sells only two products, Product A and Product B.

	Product A	Product B	Total
Selling price	$50	$30
Variable cost per unit	$20	$10
Total fixed costs			$2,110,000

Stella sells two units of Product A for each unit it sells of Product B. Stella faces a tax rate of 40%. Stella desires a net after-tax income of $54,000. The breakeven point in units would be ________.
◦ 25,250 units of Product A and 50,500 units of Product B
◦ 27,500 units of Product A and 55,000 units of product B
◦ 50,500 units of Product A and 25,250 units of Product B
◦ 55,000 units of Product A and 27,500 units of Product B

asdfasdf · **Reply #1 on:** Mar 6, 2021

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