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ID: 2509445 • Letter: #
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?90% Tue 2:59 PM ignmen Main.do?invokere assignme ?| | a search eBook Show Me How Sales Mix and Break-Even Analysis Michael Company has fixed costs of $1,338,250. The unit selling price, variable cost per unit, and contribution margin per unit for the company's two products follow Product Selling Price Variable Cost per Unit Contribution Margin per Unit sso 250 Q0 $470 $190 630 380 The sales mix for Products QQ and ZZ is 50% and 50%, respectively. Determine the break-even point n units or QQ and Z. If required, round your answers to the nearest whole number. a. Product QQ 3,824.50 X units b. Product zz 3,823.50Xunits ?Check My Work tnibution margn the combined unit seling price. Divide the fed costs by the combined unit contnoution margn to find breai- even po in units. Units for Q and Z will be break-even point in units times the sales mox percentages for each PreviousNext 0 more Check My Work uses remaining All work saved.Explanation / Answer
Weighted average contribution margin per unit
= (Product QQ contribution margin per unit * Sales mix % of Product QQ ) + (Product ZZ contribution margin per unit * Sales mix % of Product ZZ )
= ($280 * 50 %) + ($250 *50 %) = $140 + $125 = $265
Break even point in units of Sales Mix = Total fixed cost / Weighted average contribution margin per unit
= $1,338,250 / $265 = 5,050 units
Answer a. For Product QQ = Break even point in units of Sales Mix * Sales mix % of Product QQ
= 5,050 units * 50 % = 2,525 units
Answer b. For Product ZZ = Break even point in units of Sales Mix * Sales mix % of Product ZZ
= 5,050 units * 50 % = 2,525 units
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