Yard Tools manufactures lawnmowers, weed-trimmers, and chainsaws. Its sales mix

Question

Yard Tools manufactures lawnmowers, weed-trimmers, and chainsaws. Its sales mix and unit contribution margin are as follows. Unit Contribution Margin Lawnmowers Weed-trimmers Chainsaws Sales Mix 20% 50 % 30 % $31 $25 $37 Yard Tools has fixed costs of $4,350,800. Compute the number of units of each product that Yard Tools must sell in order to break even under this product mix. (Use the Weighted-Average Unit Contribution Margin Ratio rounded to 2 decimal places e.g. 0.25 and round final answers to 0 decimal places, e.g. 2,510.) Lawnmowers Weed-trimmers Chainsaws units units units

Explanation / Answer

Weighted average contribution margin=Respective contribution margin*Respective Sales Mix

=(31*0.2)+(25*0.5)+(37*0.3)=$29.8

Hence total breakeven=Fixed cost/WEighted average contribution margin

=(4350800/29.8)=146000 units

Lawmowers(146000*0.2) 29200 units Weed-trimmers(146000*0.5) 73000 units Chainsaws(146000*0.3) 43800 units

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