Question

Ch 05 Ex5-22 Saved Exercise 05-22 CVP analysis using composite units LO P4 16 points Handy Home sells windows and doors in the ratio of 7:3 (windows doors). The selling price of each window is $103 and of each door is $253. The variable cost of a window is $64.00 and of a door is $176.50. Fixed costs are $577,875. (Enter your "per unit" values in two decimal places.) eBook (1) Determine the selling price per composite unit. Quantity Windows Selling Price per unit Total per composite unit Doors Variable costs per unit Total per composite unit (2) Determine the variable costs per composite unit. Quantity Windows Doors Print Contribution margin per composite unit References Contribution margin (3) Determine the break-even point in composite units. Choose Numerator: Choose Denominator: Break Even Units Break even units = (4) Determine the number of units of each product that will be sold at the break-even point. Quantity Number of composite units to break even. Unit sales at break-even point Windows Doors Total

Answer 1

1	Selling price per composite unit:
		Quantity		Selling price per unit		Total per composite unit
	Windows	7		103		721.00
	Doors	3		253		759.00
						1480.00
2	Variable cost per composite unit:
		Quantity		Variable cost per unit		Total per composite unit
	Windows	7		64		448.00
	Doors	3		176.50		529.50
						977.50
	Contribution margin per composite unit
		Selling price		1480
	Less:	Variable cost		977.50
		Contribution margin		502.50
3	Break even point in composite unit:
		Choose numerator	/	Choose denominator	=	Break even units
		Fixed cost	/	Contribution margin per composite unit	=	Break even units
		577875	/	502.50	=	1150
4	Unit sales at Break even point
		Quantity		Number of Composite unit to Break even		Unit sales at Break even point
	Windows	7		1150		8050
	Doors	3		1150		3450
	Total