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BM Company sells two products, X and Y. Product X sells for $12 per unit with...

BM Company sells two products, X and Y. Product X sells for $12 per unit with variable costs of $7 per unit. Product Y sells for $20 per unit with variable costs of $12 per unit. Total fixed costs for the company are $50,000. BM Company typically sells three (3) Product X’s for every Product Y.
Q8a. The weighted average contribution is: ____(rounded)
A. $6.50 B. $23 C. 5.75 D. 11.50 E) None of these.


Q8b. What is the breakeven point in total units?_____ (rounded)
A. 6522 B. 7693 C. 8696 D. 2173 E) None of these.

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Answer #1

8a. Weighted average contribution margin

= Product X (12-7)*3/4 + Product Y (20-12)*1/4

= 5.75

Option C

8b. Break-even point = Fixed cost/Weighted average contribution margin

= 50,000/5.75

= 8696

Option C
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