Question

Steven Company has fixed costs of $348,168. 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 $1,200 $450 $750 Y 452 242 210 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.

Answer 1

Answer: See explanation

Explanation:

The unit selling price of sale mix will be:

= (1200 × 60%) + (452 × 40%)

= 720 + 180.8

= 900.8

The unit variable cost of sales mix will be:

= (450 × 60%) + (242 × 40%)

= 270 + 96.8

= 366.8

The unit contribution margin of sales mix will be:

= 900.8 - 366.8

= 534

Break even sales unit will be:

= 348,168 / 534

= 652

The break-even point in units of X will be:

= 60% × 652

= 391.2

The break-even point in units of Y will be:

= 40% × 652

= 260.8