Gayle’s Chemical Company is a manufacturer of cosmetic products in Jamaica. Due to the onslaught of the coronavirus (COVID -19), Gayle decided to produce two new products to help in reducing the...

Gayle’s Chemical Company is a manufacturer of cosmetic products in Jamaica.

Due to the onslaught of the coronavirus (COVID -19), Gayle decided to produce two new products to help in reducing the spread of the virus. The following information is available:

                                                                     Hand Sanitizer           Gloves

Selling price per unit                                    $46                                 $36

Variable cost per unit                                   $38                                 $24

Total fixed costs are $234,000. Willard plans to sell 21,000 units of Hand Sanitizer and 7,000 units of Gloves.

Required:

1. Compute the contribution margin for each product.




3. What is the expected net income?
   

1. Assume the sales mix is 3 units of Hand Sanitizer for every 1 unit of Gloves.
   What is the break-even point in units for each product?

Assume the sales mix is 3 units of Hand Sanitizer for every 2 units of Gloves.
What is the break-even point in units for each product?