Handy Home sells windows and doors in the ratio of 8:2 (windows:doors). The sell

Question

Handy Home sells windows and doors in the ratio of 8:2 (windows:doors). The selling price of each window is $120 and of each door is S270. The variable cost of a window is 372.50 and of a door is $185.00. Fixed costs are $275,000. (Enter your "per unit" values in two decimal places.) the selling price per c unit Quantity Selling Price per unit Total per composite unit Windows Doors the variable costs per c unit. QuantityVariable costs per unit Total per composite unit Windows Doors Contribution margin per composite u nit Contribution margin the break-even point in site units. Choose Numerator:I Break Even Units Break even units e the number of units of each product that will be sold at the break-even point. Number of composite units to break even Unit sales at break-even Quantity point Windows Doors

Explanation / Answer

(1) Determine the selling price per composite unit Quantity Selling price per unit Total per composite unit Windows 8 120 960 Doors 2 270 540 1500 (2) Determine the variable costs per composite unit Quantity Variable costs per unit Total per composite unit Windows 8 72.5 580 Doors 2 185 370 950 Contribution margin per composite unit Selling price per unit 1500 Less: Varaible cost per unit 950 Contribution Margin 550 (3) Determine the break even point in composite unit Choose Numerator / Choose Denominator = Break Even Units Fixed costs / Contribution Margin = Break Even Units 275,000 / 550 = 500 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 8 500 4000 Units Doors 2 500 1000 Units

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