Business Solutions sells upscale modular desk units and office chairs in the rat

Question

Business Solutions sells upscale modular desk units and office chairs in the ratio of 3:2 (desk unit:chair). The selling prices are $1,170 per desk unit and $420 per chair. The variable costs are $670 per desk unit and $170 per chair. Fixed costs are $300,000. Required: 1. Compute the selling price per composite unit. 2. Compute the variable costs per composite unit. 3. Compute the break-even point in composite units. 4. Compute the number of units of each product that would be sold at the break-even point.

Explanation / Answer

desk chairs SP 1170 420 VC per unit 670 170 Contribution 500 250 ratio 0.6 0.4 total contribution 300 100 400 FC 300000 BEP 450 300 750

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