Using the following unit data for a company that produces
Product A and B, what is...
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Using the following unit data for a company that producesProduct A and B, what is the breakeven point (round to nearestunit) when fixed costs total $175,000? Product A Product B Units sold last year 2,250 1,000 Sales price $200 $450 Cost of goods sold 145 350 Salescommission 15 37 Variable costs 160 387 Contribution margin $ 40 $ 63
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3.9 Ratings (415 Votes)
Breakeven units
Product A= 2574 units
Product B= 1144 units
Working
Product
A
Product
B
A
Price
$
200.00
$ 450.00
B
Variable Cost per unit
$
160.00
$ 387.00
C = A - B
Contribution Margin per unit
$
40.00
$ 63.00
D
Product Mix
69.23%
30.77%
E = C x D
Weighted Average Contribution Margin
$
27.69
$ 19.38
A
Total Fixed Cost
$ 1,75,000.00
B
Weighted Average Contribution Margin (27.69+19.38)
$
47.08
C = A/B
Multi Product Break Even point
3,717.32
C x 42%
Product A
2,574
C x 29%
Product B
1,144
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