5. Gatewood Hills Corporation has three products X, Y, and Z. The company’s fixed costs are $69,000. The sales mix for its products are 3 units of X, 4 units of Y, and 1 unit of Z. Information about the three products follows: X Y Z Projected sales in dollars $192,000 $192,000 $64,000 Selling price per unit $40 $30 $40 Contribution margin ratio 30% 35% 35% Calculate the company's break-even point in composite units and sales dollars. (Hint: You will need to calculate the selling price of a composite unit and CM of a composite unit to calculate the break-even point in composite units. (2 points) (b) Calculate the number of units of each individual product to be sold at the break-even point. (Check: At break-even point you should have 2,250 units of product X.
|
X |
Y |
Z |
|
|
Projected sales in dollars |
$192,000 |
$192,000 |
$64,000 |
|
Selling price per unit |
$40 |
$30 |
$40 |
|
Contribution margin ratio |
30% |
35% |
35% |
1.
| X | Y | Z | ||
| a) | Selling Price Per unit | 40.00 | 30.00 | 40.00 |
| b) | Sales Mix | 3.00 | 4.00 | 1.00 |
| c) | a*b | 120.00 | 120.00 | 40.00 |
| d) | Selling Price of composite Unit | 280.00 | ||
| e) | Contribution Margin Ratio | 30% | 35% | 35% |
| f) | ( c * e) | 36.00 | 42.00 | 14.00 |
| g) | Cm of Composit Unit | 92.00 |
| Fixed Cost | 69,000.00 |
| Breakeven of Composite Unit = | Total fixed Cost / Contribution Margin per Unit |
| Breakeven of Composite Unit = | 69000/92 = 750 Composite units |
2.
|
The number of units of each individual product to be sold:
|
Get Answers For Free
Most questions answered within 1 hours.