2.
Thomlins on Company is considering the development of two products: no. 765 or
no. 766. Manufacturing cost information follows.

No.
765

NO.
766

Annual
Fixed Costs

$250,000

$350,000

Variable
cost per unit

$35

$25

Regardless of which product is introduced, the anticipated selling price will
be $60 and the company will pay a 10% sales commission on gross dollar sales.
Thomlinson will not carry an inventory of these items.

A. What is the break-even sales volume (in dollars) on product no. 766?
B. Which of the two products will be more profitable at a sales level of 20,000
units?
C. At what unit-volume level will the profit/loss on product no. 765 equal the
profit/loss on product no. 766?
2.
Thomlins on Company is considering the development of two products: no. 765 or
no. 766. Manufacturing cost information follows.

No.
765NO.
766Annual
Fixed Costs$250,000$350,000Variable
cost per unit $35$25

Regardless of which product is introduced, the anticipated selling price will
be $60 and the company will pay a 10% sales commission on gross dollar sales.
Thomlinson will not carry an inventory of these items.

A. What is the break-even sales volume (in dollars) on product no. 766?
B. Which of the two products will be more profitable at a sales level of 20,000
units?
C. At what unit-volume level will the profit/loss on product no. 765 equal the
profit/loss on product no. 766?