Question

Manatoah Manufacturing produces 3 models of window air conditioners: model 101, model 201, and model 301. The sales price and variable costs for these three models are as follows:

Product	Sales Price per Unit	Variable Cost per Unit
Model 101	$270	$190
Model 201	350	220
Model 301	395	240

The current product mix is 4:3:2. The three models share total fixed costs of $714,000.

A. Calculate the sales price per composite unit.

Sales price $ per composite unit

B. What is the contribution margin per composite unit?

Contribution margin $ per composite unit

C. Calculate Manatoah’s break-even point in both dollars and units.

Break-even point in dollars $

Break-even point in units  units

D. Using an income statement format, prove that this is the break-even point. If an amount is zero, enter "0".

Income Statement
Sales
Model 101	$
Model 201
Model 301
Total Sales	$
Variable Costs
Model 101	$
Model 201
Model 301
Total Variable Costs	$
Contribution Margin	$
Fixed Costs
Net Income	$

Answer 1

Answer with working notes is given below