following information pertains to questions 12 and 13. Jennifer Company sells bo

Question

following information pertains to questions 12 and 13. Jennifer Company sells both chairs and tables at the following per unit data: Chairs IS..i Unit Data Selling price Variable costs Contribution margin Sales mix Tables $200 120 $50 35 /S 12. (S.O. 8) Assuming $210,000 fixed costs, how many tables and chairs should Jennfer Company sell to break even? Tables Ch a. 500 b. 1,000 c. 1,500 d. 2,000 2,000 4,000 6,000 8,000 7500-2- -1500 13. (S.o. 8) Assuming $118,580 fixed costs, what is the total revenues in chairs Jennifer Company needs to break even? a. $154,800 b. $169,400 c. $175,200 d. $188,600 118,580

Explanation / Answer

Quetion -13

n this type of muti-product mix models, easy approach is to calculate BEP in mixes ( rather than units)

CM ( Contribution Margin) per mix = 1 unit of table * 80 + 4 units of chairs * 15 = 80 + 60 = 140 mixes

BEP in terms of mixes = fixed cost / CM per mix = 118580 / 140 = 847 mixes

Chairs = 4 chairs in every mix so total chairs to be sold to Breakeven = 847 * 4 = 3388 chairs.

Sales reveue to be generated = 3388 * 50 = 169400...............final answer

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