Razorback Sports Inc

Accounting Jul 29, 2020

Razorback Sports Inc. purchased eculpment on July 1, 2016 Razorback Sports took the maximum amount of $179 depreclat (nu bonus depreciation. The equipmenlis all your properly. (Thic corpuralion uses MACRS dcpreciation for lux purposes.) Cost of the quiprnicul 032,500 u.

The Lifestyle Company (TLC) is considering whether launch the following 2 new products.

Product Red
Product Blue

Expected price and cost data for the two types of products are as follows.

	Red	Blue
Selling price	$100	$50
Variable Manufacturing Cost	$8.00	$3.00
Variable Non Manufacturing Cost	$3.50	$1.50

Fixed cost to manufacture both products is $300,000. The expected sales mix of Red and Blue: for every 35 units that TLC sells, 5 units would be from selling Red while 30 units would be from selling Blue.

Assuming TLC operates in a way that is consistent with all the relevant Cost-Volume-Profit assumptions, the number of units of Red and Blue it needs to sell to break-even are closest to:

Group of answer choices

1,110 Red and 6,660 Blue

830 Red and 5,000 Blue

1,200 Red and 6,500 Blue

860 Red and 5,155 Blue

800 Red and 4,800 Blue