Question

# eyden Company has fixed costs of \$350,900. The unit selling price, variable cost per unit, and...

eyden Company has fixed costs of \$350,900. The unit selling price, variable cost per unit, and contribution margin per unit for the company’s two products follow:

 Product Model Selling Price Variable Cost per Unit Contribution Margin per Unit Yankee \$100 \$60 \$40 Zoro 140 80 60

The sales mix for products Yankee and Zoro is 10% and 90%, respectively. Determine the break-even point in units of Yankee and Zoro.

a. Product Model Yankee fill in the blank 1 units

b. Product Model Zoro fill in the blank 2 units

Answer: a) Breakeven Point of Yankee = 605 units

b) Breakeven Point of Zoro = 5,445 units

Explanation:

 Yankee Zoro Contribution per unit (Given) \$40 \$60 Sales Mix (Given) 10% 90% Contribution*Sales Mix 40*10% = \$4 60*90% = \$54

Weighted Average contribution per unit = 4 + 54

= \$58

Fixed Costs (Given)= \$350,900

Breakeven Point (In units) of company = Fixed Cost / Weighted Average contribution per unit

= 350,900 / 58

= 6,050 units

Breakeven point of Yankee= 6,050 * 10% = 605 units

Breakeven point of Zoro = 6,050 * 90% = 5,445 units