Question

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 1

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