Fort Scott Operations And Supply Chain Management Assignment Help - Patriot Co.

Question - Patriot Co. manufactures and sells three products: red, white, and blue. Their unit sales prices are
red, $74; white, $108; and blue, $99. The per unit variable costs to manufacture and sell these
products are red, $48; white, $75; and blue, $90. Their sales mix is reflected in a ratio of 5:4:2 (red:
white: blue). Annual fixed costs shared by all three products are $179,200. One type of raw material
has been used to manufacture all three products. The company has developed a new material of
equal quality for less cost. The new material would reduce variable costs per unit as follows: red, by
$10; white, by $16; and blue, by $13. However, the new material requires new equipment, which will
increase annual fixed costs by $22,400. (Roun ...Read More d answers to whole composite units.)

Required
1. If the company continues to use the old material, determine its break-even point in both sales units
and sales dollars of each individual product.
2. If the company uses the new material, determine its new break-even point in both sales units and
sales dollars of each individual product.
Analysis Component
3. W hat insight does this analysis offer management for long-term planning? ...Read Less

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