Question

Bobby Co. sells two products, X and Y. Last year, Bobby sold 18,000 units of X's...

Bobby Co. sells two products, X and Y. Last year, Bobby sold 18,000 units of X's and 12,000 units of Y's. The unit selling price, variable cost per unit, and contribution margin per unit for the company’s two products are provided below.

Product

Selling Price

Variable Cost per unit

Contribution Margin

per unit

X

$180

$100

$80

Y

$100

$60

$40

Assuming that last year’s fixed costs totaled $160,000. What was Bobby Co's break-even point in units of enterprise product "E"?

2,500 units

2,000 units

6,000 units

2,857 units

Business   Finance   
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Answer #1

Ans 2500 units

PRODUCT UNIT SALES PRICE (A) UNIT VARIABLE COST (B) CONTRIBUTION C = (A-B) % OF SALES (W/N) COMBINED CONTRIBUTION = (C )* % OF SALES
X 180 100 80 60.00% 48.000
Y 100 60 40 40.00% 16.000
64.000
BREAK-EVEN POINT FIXED COST / COMBINED CONTRIBUTION PER UNIT
160000 / 64
2500 UNITS
SALES RATIO
% OF SALES
X 18000 60.00%
Y 12000 40.00%
30000 100.00%
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