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Bramble Corp. has two divisions—Standard and Premium. Each division has hundreds of different types of tennis...

Bramble Corp. has two divisions—Standard and Premium. Each division has hundreds of different types of tennis racquets and tennis products. The following information is available: Standard Division Premium Division Total Sales $400000 $600000 $1000000 Variable costs 300000 340000 Contribution margin $100000 $260000 Total fixed costs $300000 What is the break-even point in dollars?

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Answer #1

Break Even Point In Dollars = Fixed Cost / Weighted Average Contribution Margin

= $ 300,000 / 36%

= $ 833,333.33

Hence the correct answer is $ 833,333.33

Note :

Weighted Average Contribution Margin = Total Contribution Margin / Total Revenues *100

= $ 360,000 / $ 1,000,000 * 100

= 36.00%

Standard Premium Total
Sales 4,00,000 6,00,000 10,00,000
Less: Variable Cost   3,00,000 3,40,000 6,40,000
Contribution Margin 1,00,000 2,60,000 3,60,000
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