Question

Bass Systems manufactures windows, tires, and shocks. All 3 products are profitable. Bass Systems expected to...

Bass Systems manufactures windows, tires, and shocks. All 3 products are profitable. Bass Systems expected to sell the following next year.

40,000 windows

10,000 tires

50,000 shocks

Bae expects $176,000 in fixed costs. Below is more information to about the company.

Product Contribution Margin

windows $2

tires   $1

screws $3

What is Bass's break-even point in units?

Business   Accounting   
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Answer #1

Computation of Breakeven point in units:

Break Even Units = Fixed Cost/Weighted Average Contribution Margin per unit

Weighted Average Contribution Margin per unit will be calculated is as follows:

Hence, Break Even Point is as follows:

Fixed Cost A $176,000.00
Weighted Average Contribution Margin per unit B $2.40
Break Even Units C=A/B 73333.33 units

Hence, Break Even Point in Units are 73,333.33 or 73,334 units approximiately.

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