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?
Homework Answers
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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