Qusstion 312 markss) A manufacturing Company produces two product X andY both pr

Question

Qusstion 312 markss) A manufacturing Company produces two product X andY both products: Y,The following information is presented fo Selling price per unit Variable cost per unit Sales mix $30 20 $20 Total fixed costs are $292,500 Required: a. Calculate breakeven point in units and in total dollars of both products X and Y if the sales mix is3 3 units of X for every unit of Y b. What would be the net income if the company sold 21000 units of X Answer: and 7000 units of Y? Time ls up bera" se that I did not appl3 Solution T know the soha tion 1. 4

Explanation / Answer

Calculate break even point in units and dollars :

Contribution margin per unit = X = 10 ; Y=15

Weighted average contribution margin = (10*3/4+15*1/4) = 11.25 per unit

Break even point = Fixed cost/weighted average contribution margin per unit

= 292500/11.25

Break even point = 26000 units

Product X = 26000*3/4 = 19500 Units = 19500*30 = 585000

Product Y = 26000*1/4 = 6500 units = 6500*20 = 130000

b) Net operating income :

Net operating income= Contribution margin-Fixed cost

= (21000*10+7000*15)-292500

Net operating income = 22500

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