Question

Mayfield Company sells two products, Blue models and Plaid models. Blue models sell for $43 per unit with variable costs of $30 per unit. Plaid models sell for $52 per unit with variable costs of $45 per unit. Total fixed costs for the company are $9200. Mayfield Company typically sells four Blue models for every five Plaid models. What is the breakeven point in total units? (Round any intermediary calculations to the nearest whole number.)

Answer 1

		Blue models	Plaid models	Total
	Selling price	$43	$52
	Variable cost	$30	$45
	Contribution margin	$13	$7
	Sales mix	4	5
	Fixed cost			9200
	Weighted contribution	$6.00	$4.00	$10.00
		(13*4/9)	(13*5/9)
	Breakeven point in total units =			Fixed cost / Weighted contribution
	Breakeven point in total units =			9200/10
	Breakeven point in total units =			920	Units
	Blue models unit			409	Units	(920*4/9)
	Plaid models unit			511	Units	(920*5/9)