eBook Show Me How Calculator Sales Mix and Break-Even Analysis Megan Company has

Question

eBook Show Me How Calculator Sales Mix and Break-Even Analysis Megan Company has fixed costs of $170,340. 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 o0 $150 $90 $60 90 60 30 The sales mix for Products QQ and ZZ is 70% and 30% respectively. Determine the break-even pointin units of Q and 22. If required round your answers to the nearest whole number. a. Product QQ X units b. Product ZZ units My Work Subtract the combined unit variable cost from the combined unit selling price. Divide the fixed costs by the combined unit contribution margin to find break-even point in units. Units for Q and Z will be break-even point in units times the sales mix percentages for each.

Explanation / Answer

Weighted average contribution margin = (60*70%)+(30*30%)= 51 Overall break even point = 170340/51= 3340 a Product QQ 2338 =3340*70% b Product ZZ 1002 =3340*30%

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