Candies Inc. manufactures and sells two products, marshmallowbunnies and jelly b

Question

Candies Inc. manufactures and sells two products, marshmallowbunnies and jelly beans. The fixed costs are $350,000, and thesales mix is 70% marshmallow bunnies and 30% jelly beans. The unitselling price and the unit variable cost for each product are asfollows:

Products                     Unit SellingPrice           Unit Variable Cost
Marshmallowbunnies                  $2.40                                     $1.00
Jellybeans                                   $1.80                                     $0.90


a. Compute the break-even sales (units) for the overallproduct, E. ?

b. How many units of each product, marshmallow bunnies and jellybeans, would be sold at the break-even point?

Explanation / Answer

Marshmallow bunnies

Jelly beans

$2.40

$1.80

$1.00

$0.90

$1.40

$0.90

Marshmallow bunnies

Jelly beans

Selling Price Per unit

$2.40

$1.80

Variable Cost

$1.00

$0.90

Unit Contribution

$1.40

$0.90

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