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The Mesa plant currently produces 11,000 units of Product X but its maximum capacity is 21,000...

The Mesa plant currently produces 11,000 units of Product X but its maximum capacity is 21,000 units. Assume that all of the annual overhead costs of 31,000 is fixed. What is the margin (profit) per unit of Product X that is used to calculate the break-even point?

Enter your answer as a number rounded to two decimal points, e.g., 3.14, 25.70, 100.00, 1540.99. Do not enter any letters, unit symbols, commas, or other non-numerical characters!

Next, Derek Thompson looks at the profitability report of the only product produced in the Chandler plant.

Product Y
Sales price 74
Variable costs 30
Overhead allocation 16


The Chandler plant currently produces 17,000 units of Product X but its maximum capacity is 31,000 units. Assume that all of the annual overhead costs of 230,000 is fixed. What is the break-even point of the Chandler plant?

Enter your answer as a number rounded to two decimal points, e.g., 3.14, 25.70, 100.00, 1540.99. Do not enter any letters, unit symbols, commas, or other non-numerical characters!

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Answer #1
a) Contribution margin per unit
Sales price 74
Less: Variable costs 30
Contribution margin per unit 44
b) Break even point = Fixed Cost / contribution margin
Break even point = $230,000/$44 5227.27 units
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