Question

Yard Tools manufactures lawnmowers, weed-trimmers, and chainsaws. Its sales mix and unit contribution margin are as follows. Unit Contribution Margin $31 Lawnmowers Weed-trimmers Chainsaws Sales Mix 20 % 50% 30 % $21 $37 Yard Tools has fixed costs of $4,031,000. Compute the number of units of each product that Yard Tools must sell in order to break even under this product mix. Lawnmowers units Weed-trimmers units Chainsaws units Click if you would like to Show Work for this question: Open Show Work

Answer 1

Ans.		Contribution margin per unit (a)	Product mix (b)	Weighted Contribution margin (a*b)
	Lawnmowers	$31.00	20%	$6.20
	Weed - trimmers	$21.00	50%	$10.50
	Chainsaws	$37.00	30%	$11.10
	Weighted Contribution margin			$27.80
	Break even point in units (Total company)   =   Total fixed cost/ Weighted contribution margin
		$4,031,000 / $27.80
		$145,000
	Break even point of particular product   =    Break even point in units for Total company * Product mix
	Lawnmowers	145,000 * 20%
		29,000	units
	Weed - trimmers	145,000 * 50%
		72,500	units
	Chainsaws	145,000 * 30%
		43,500	units