80.2K

Verified Solution

Link Copied!

Smith Company can produce two types of carpet cleaners, Brighter and Cleaner. Data on these two products are as follows:

Sales volume in units

Unit sales price

Unit variable cost

The number of machine hours to produce one unit of Brighter is $1,$ while the number of machine hours for each unit of Cleaner is $2.$ Total

fixed costs for the manufacture of both products are $$292,500.$

Required:

Determine the breakeven point in total units for Smith Company, based on the assumption that the sales mix $($on the basis of relative

sales volume in units$)$ remains constant. Use the weighted$-$average contribution margin approach.

At this breakeven level, how many units of each product must be sold? Due to rounding, the total breakeven units for Requirement $2$

may differ slightly than in Requirement $1.$

Using the Indirect approach, what is the overall breakeven point in sales dollars? Use the breakeven units computed in Requirement

Complete this question by entering your answers in the tabs below.

Required $1$

Required $3$

Determine the breakeven point in total units for Smith Company, based on the assumption that the sales mix $($on the basis of

relative sales volume in units$)$ remains constant. Use the weighted$-$average contribution margin approach. $($Enter Sales mix

$($based on units$)$ as a whole percentage and round Weighted$-$average CM per unit to two decimal places.$)$

Answer & Explanation Solved by verified expert

See Answer