Question

A company sells two models of a product—basic and premium. The basic model has a variable...

A company sells two models of a product—basic and premium. The basic model has a variable cost of $75 and sells for $100. The premium model has a variable cost of $100 and sells for $150. Fixed costs are $15,000. If the company usually sells 5,000 basic models and 2,500 premium models, then the break-even point in composite units is _________ units.

What are the steps

Homework Answers

Answer #1
Contribution Margin Per Unit = Sales price - variable cost per unit
basic
= $100-75
=$25
premium
=$150-100
=$50
Standard mix = 5000 models of basics and 2500 models of premium
contributio margin per standard mix = ($25*5000) + ($50*2500)
=$125000+$125000
=$250000
Break even point in sales mix = Fixed cost / contribution margin per sales mix
=$15000/250000
=0.06 units
Number of units = 0.06 sales mix *7500 models per sales mix
=450 units
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
oFly Corporation sells three different models of a mosquito “zapper.” Model A12 sells for $50 and...
oFly Corporation sells three different models of a mosquito “zapper.” Model A12 sells for $50 and has variable costs of $35. Model B22 sells for $100 and has variable costs of $70. Model C124 sells for $400 and has variable costs of $300. The sales mix of the three models is A12, 60%; B22, 15%; and C124, 25%. If the company has fixed costs of $269,500, how many units of each model must the company sell in order to break...
Manatoah Manufacturing produces 3 models of window air conditioners: model 101, model 201, and model 301....
Manatoah Manufacturing produces 3 models of window air conditioners: model 101, model 201, and model 301. The sales price and variable costs for these three models are as follows: Product Sales Price per Unit Variable Cost per Unit Model 101 $270      $190        Model 201 350      220        Model 301 395      240        The current product mix is 4:3:2. The three models share total fixed costs of $714,000. A. Calculate the sales price per composite unit. Sales price $ per composite unit B....
Manatoah Manufacturing produces 3 models of window air conditioners: model 101, model 201, and model 301....
Manatoah Manufacturing produces 3 models of window air conditioners: model 101, model 201, and model 301. The sales price and variable costs for these three models are as follows: Product Sales Price per Unit Variable Cost per Unit Model 101 $280      $185        Model 201 350      215        Model 301 405      240        The current product mix is 4:3:2. The three models share total fixed costs of $334,500. A. Calculate the sales price per composite unit. Sales price $ per composite unit B....
oFly Corporation sells three different models of a mosquito “zapper.” Model A12 sells for $50 and...
oFly Corporation sells three different models of a mosquito “zapper.” Model A12 sells for $50 and has variable costs of $35. Model B22 sells for $100 and has variable costs of $70. Model C124 sells for $400 and has variable costs of $300. The sales mix of the three models is A12, 60%; B22, 15%; and C124, 25%. If the company has fixed costs of $269,500, how many units of each model must the company sell in order to break...
Scrushy Company sells a product for $150 per unit. The variable cost is $110 per unit,...
Scrushy Company sells a product for $150 per unit. The variable cost is $110 per unit, and fixed costs are $200,000. Determine (a) the break-even point in sales units and (b) the break-even point in sales units if the company desires a target profit of $50,000. a. Break-even point in sales units b. Break-even point in sales units if the company desires a target profit of $50,000
The Waterfall Company sells a product for $150 per unit. The variable cost is $80 per...
The Waterfall Company sells a product for $150 per unit. The variable cost is $80 per unit, and fixed costs are $270,000. Determine the following: Round answers to the nearest whole number. a. Break-even point in sales units units b. Break-even points in sales units if the company desires a target profit of $36,000 units
Target Profit Forest Company sells a product for $250 per unit. The variable cost is $100...
Target Profit Forest Company sells a product for $250 per unit. The variable cost is $100 per unit, and fixed costs are $615,000. Determine (a) the break-even point in sales units and (b) the break-even point in sales units if the company desires a target profit of $239,850. a. Break-even point in sales units units b. Break-even point in sales units if the company desires a target profit of $239,850 units
1) Bears Company sells a product for $15 per unit. The variable cost is $10 per...
1) Bears Company sells a product for $15 per unit. The variable cost is $10 per unit and fixed costs are $1,750,000. Determine: The Break-Even point in sales units The Break-Even point if selling price were increased to $655 per unit 2) Bear Company sells a product for $15 per unit. The Variable cost is $10 per unit and fixed costs are $1,750,000. Determine: The Break-Even Point in sales units The Sales units required for the company to achieve a...
Biscuit Company sells its product for $50. In addition, it has a variable cost ratio of...
Biscuit Company sells its product for $50. In addition, it has a variable cost ratio of 55 percent and total fixed costs of $6,875. How many units must be sold in order to obtain a before-tax profit of $12,000? a.839 units b.600 units c.240 units d.480 units Biscuit Company sells its product for $50. In addition, it has a variable cost ratio of 45 percent and total fixed costs of $6,875. What is the break-even point in units for Biscuit...
Target Profit Outdoors Company sells a product for $185 per unit. The variable cost is $70...
Target Profit Outdoors Company sells a product for $185 per unit. The variable cost is $70 per unit, and fixed costs are $563,500. Determine (a) the break-even point in sales units and (b) the sales units required for the company to achieve a target profit of $101,430. a. Break-even point in sales units units b. Break-even point in sales units required for the company to achieve a target profit of $101,430 units
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT