Question

Helpful hardware sells windows (80% of sales) and doors (20% of sales). The selling price of each window is $400 and of each door is $1,000. The variable cost of each window is $250 and of each door is $700. Fixed costs are $1,440,000. The break-even point in units using the weighted-average contribution margin is:.

Answer 1

The number of units to be produced for breakeven will be windows =6400 and doors = 1600

How to calculate the number of units?

Contribution per unit will be:

Windows = 400-250 = $150 per unit

Doors = 1000-700 = $300 $/per unit

Total contribution of a bundle = 20% 300+150 *80 % = 180 $ per unit

Break even unit will be:

= 1440000/180 $

= 8000 units

Windows =8000 * 0.8

= 6400 units

Doors = 8000 - 6400

= 1600 units

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