Google 39 WordPress IOONUEmal Sgr in to BCComec value 100 points Problem 7-12 A

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Google 39 WordPress IOONUEmal Sgr in to BCComec value 100 points Problem 7-12 A firm is selling two products, chairs and bar stools, each at $55 per unit. Chairs have a variable cost of $30, and bar stools $20. Fixed cost for the firm is $20,000. a. If the sales mix is 1:1 (one chair sold for every bar stool sold), what is the break-even point in dollars of sales? In units of chairs and bar stools? (Round up your unit answers to the next whole number and round "Break-even point" to the nearest whole number.) Break-even point Number of chairs Number of bar stools b. If the sales mix changes to 1:4 (one chair sold for every four bar stools sold), what is the break-even point in dollars of sales? In units of chairs and bar stools? (Round up your unit answers to the next whole number and round "Break-even point" to the nearest whole number.) Break-even point Number of chairs Number of bar stools eBook & Resources References Worksheet Problem 7-12 0 Type here to search

Explanation / Answer

Answer:- Break even - Units of chairs and bar stools

Break even = Fixed cost /(Sales price – variable cost)

Break Even = 20,000/ (55*2 –(30+20)) =20000/60=333.33=333 per unit

Break Even Dollar =

1 chair + 1 bar stool = $55+$55 =$110

Break Even = 333*$110 =$36630

So answers are:- Break Even = $36630 , Number of chairs = 333, Number of bar stools = 333

Answer:- Sales price = $55*5 =$275

Variable cost= $30 +$20*4 = $110

Breakeven - Units of chairs and bar stools

Break even = Fixed cost /(Sales price – variable cost)

Break Even = 20,000/(275-110) =121.21=121 per chair

Bar Stool = 121*4=484 per bar stool

Break Even – Dollar

1 chair + 4 bar stool =$275

Break even = 121*275 =$33275

So answers are:- Break Even = $33275 , Number of chairs = 121, Number of bar stools = 484

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