Question

​Jackie's Snacks sells​ fudge, caramels, and popcorn. It sold​ 9,000 units last year. Popcorn outsold fudge...


​Jackie's Snacks sells​ fudge, caramels, and popcorn. It sold​ 9,000 units last year. Popcorn outsold fudge by a margin of 2 to 1. Sales of caramels were the same as sales of popcorn. Fixed costs for​ Jackie's Snacks are​ $10,000. Additional information​ follows:

Product

Unit Sales Prices

Unit Variable Cost

Fudge

​$5

​$2.00

Caramels

​$8

​$6.00

Popcorn

​$7

​$3.00

The breakeven sales volume in units for​ Jackie's Snacks is​ (Round the final answer up to the nearest​ unit.)

Business   Accounting   
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Homework Answers

Answer #1

let fudge sales = x

popcorn sales = 2 x fudge sales = 2x

caramel sales = popcorn = 2x

total sales = x + 2x+ 2x = 5x

9000 units = 5x

x = 1800 units

popcorn and caramel sales = 2 x 1800 = 3600 units each

fudge sales = 1800 units

fixed costs = 10000

contribution of

fudge = 5 - 2 = 3 per unit

caramel = 8 -6 = 4 per unit

popcorn = 7 -3 = 4 per unit

Weighted average contribution per unit = contribution x sales for all products / total sales

Weighted average contribution per unit = (3 x 1800 + 4 x 3600 + 4 x 3600) / 9000

Weighted average contribution per unit = 34200/9000

Weighted average contribution per unit = 3.8

Breakeven sales = fixed costs / Weighted average contribution per unit

Breakeven sales = 10000/3.8

Breakeven sales = 2631.57 = 2632 (rounded off)

Thanks! if you have any doubts do leave a comment and let me know

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