4.
| Composite break-even units | 55,700 |
| Break-even units - Arid | 33,420 |
| Break-even units - Blast | 11,140 |
| Break-even units - Cyclo | 11,140 |
Calculations:
| Sales price | - | Variable cost | = | Contribution margin | |
| Arid | $25 | - | $14 | = | $11 |
| Blast | $30 | - | $24 | = | $6 |
| Cyclo | $40 | - | $34 | = | $6 |
| Contribution margin | x | % of sales mix | = | Sales mix | |
| Arid | $11 | x | 60% | = | $6.60 |
| Blast | $6 | x | 20% | = | $1.20 |
| Cyclo | $6 | x | 20% | = | $1.20 |
| Total weighted contribution | $9.00 | ||||
Composite break-even units = Fixed assets ÷ Weighted contribution = $501,300/$9.00 = 55,700 units
Break-even units - Arid = 55,700 x 60% = 33,420 units
Break-even units - Blast = 55,700 x 20% = 11,140 units
Break-even units - Cyclo = 55,700 x 20% = 11,140 units
4. The sales mix of High and Dry Company is 6 units of Arid, 2 units...
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Sales Mix and Break-Even
Analysis
Conley Company has fixed costs of $17,802,000.
The unit selling price, variable cost per unit, and
contribution margin per unit
for the company’s two products follow:
Product Model
Selling Price
Variable Cost per Unit
Contribution Margin per Unit
Yankee
$180
$99
$81
Zoro
225
135
90
The sales mix for products Yankee and Zoro is 80% and 20%,
respectively. Determine the break-even point in
units of Yankee and Zoro.
1 eBook Show Me How Sales...
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