Question

# Sales mix and break-even analysis Conley Company has fixed costs of \$15,525,000. The unit selling price,...

Sales mix and break-even analysis

Conley Company has fixed costs of \$15,525,000. The unit selling price, variable cost per unit, and contribution margin per unit for the company's two products follow:

 Product Selling Price Variable Cost per Unit Contribution Margin per Unit Yankee \$175 \$100 \$75 Zoro 255 180 75

The sales mix for products Yankee and Zoro is 20% and 80%, respectively.

Determine the break-even point in units of Yankee and Zoro of the overall (total) product, E. If required, round your answers to the nearest whole number.

Product Yankee: _______ units

Product Zoro: _______ units

 Yankee (a) Zoro (b) Total (a + b) Contribution Margin per unit (a) \$75 \$75 Sales Mix (b) 20% 80% Weighted average contribution margin per unit (c = a*b) \$15 \$60 \$75 Total Fixed Costs (d) \$15,525,000 Company wide break-even point (d / c) 207,000 Break-even point for each product based on sales mix (207,000*20/100); (207,000*80/100) 41,400 165,600 Therefore, break-even point for Yankee is 41,400 units and fo Zoro is 165,000 units.

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