Part B GH Artist Supply, Inc. is a new company that specializes in panels and frames for...

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Accounting

Part B
GH Artist Supply, Inc. is a new company that specializes inpanels and frames for artists.
In a new product line, GH managers plan to create new,eco-friendly panels in three sizes: large, medium, and small.
The current budget plan for the first year of operationsprovides the following information:
Small Medium Large
# of units 200 110 80
Selling price per unit $20 $45 $90
Variable cost per unit $14 $18 $31
Fixed costs $5,000 $2,800 $2,200
Required
Two managers within GH are arguing about the best way tocalculate the break-even point in this multi-product scenario. Eachhas their own method they would like to use.
Compute the break-even point using the two common methods usedfor multi-product scenarios.
For each method, describe the assumption that is unique to thatmethod.

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3.9 Ratings (532 Votes)

1 Individual break even point for each product Assumptions i Individual fixed costs remain constant ii Individual contribution remains constant Small Medium Large See Answer

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	Small	Medium	Large
# of units	200	110	80
Selling price per unit	$20	$45	$90
Variable cost per unit	$14	$18	$31
Fixed costs	$5,000	$2,800	$2,200