Question

Steven Company has fixed costs of $285,144. The unit selling price, variable cost per unit, and contribution margin per unit for the company's two products are provided below. Product Selling Price per Unit Variable Cost per Unit Contribution Margin per Unit X $1,392 $522 $870 Y 710 380 330 The sales mix for Products X and Y is 60% and 40%, respectively. Determine the break-even point in units of X and Y. Round answers to the nearest whole number. units of X units of Y

Answer 1

Answer:

262 units and 174 units

Explanation:

The computation of the break even point in units is shown below:

As we know that

Break even point in units = Fixed cost ÷ Contribution margin per unit

So, the equation is shown below:

The Z is the sales mix

$285,144 = 0.60Z × $870 + 0.40Z × $330

$285,144 = 522Z + 132Z

$285,144 = 654Z

So, the Z is 436

Now the break even point in units X = 436 × 60% = 262 units

And, for Y = 436 × 40% = 174 units