Question

Konerko Company sells two types of computer chips. The sales mix is 30% (Q-Chip) and 70% (Q-Chip Plus). Q-Chip has a contribution margin of $24. Q-chip plus has a contibution margin of $36. Konerko's fixed costs are $540,000. How many units of Q-chip would be sold at the break-even point?

A. 11,813

B. 5,869

C. 9,000

D. 5,000

Answer 1

1.)

Answer:

option D: 5,000

Explanation:

	Q-Chip	Q-Chip Plus	Total
Contribution margin per unit	$24	$36	$60
Sales mix	30%	70%	100%
contribution per mix	24× .30= 7.2	36 × .70 = 25.2	$32.4
Fixed costs			$540,000

Breakeven Mix =Total Fixed cost / Contribution per mix

=$540,000 / $32.4

= 16,666.67 mixes

Therefore break-even units=

Q-Chip = 16,666.67 x .3 = 5000 units
Q-Chip Plus = 16,666.67 x .7 = 11,666.7 units