Question

3.McCoy Brothers manufacture and sells two products, A and Z in the ratio of 4:2. Product A sells for $87; Z sells for $108. Variable costs for product A are $46; for Z $53. Fixed costs are $457,580. Compute the number of units of Product Z McCoy must sell to break even.

• ,453.
• 6,680.
• 8,634.
• 3,340.

• 7,207.

Answer 1

Answer :-

Product A Sells $87 and Variable Cost $46 So Diffrence is ($87 - $46) So A Part is 4

So $41 * 4 = $164................(a)

Product Z Sells $108 and Variable Cost $53 So Diffrence is ($108 - $53) So A Part is 2

So $55 * 2 = $110................(b)

So, Total is (a) + (b)

= ($164 + $110)

=$274

Now, Fixed Cost is $4,57,580

So Total Break Even Unit is $4,57,580 / $274

= 1670 Units

So the number of units of Product Z McCoy must sell to break even = 1670 units * 2

= 3,340 Units

So, Number of units of Product Z McCoy must sell to break even is 3,340 units