Question
1. Determine the breakeven point in total units and, for this breakeven point, calculate the number of units of A and B that must be
1. Determine the breakeven point in total units and, for this breakeven point, calculate the number of units of A and B that must be sold. Use the weighted-average contribution margin approach. 3. Determine the overall breakeven point in terms of sales dollars based on the weighted-average contribution margin ratio (CMR). (Hint: The weights for calculating the weighted-average CMR are based on relative sales dollars, not units, of the two products.) Break down the total sales dollars breakeven point into sales dollars for product A and sales dollars for product B. 5. Assume the original facts except that now fixed costs are expected to be $41,400 higher than originally planned. How does this expected increase in fixed costs affect the breakeven point in units? How does the percentage change in the breakeven point compare to the percentage increase in fixed costs?
._ _.__ _ __ The products olten have different unit variable costs. Thus, the total prot and t e real-(even point depen on the proportions In w Ich the products are sold. Sales mix is the relative contribution of sales among various products sold by a rm. Assume that the sales of Jordan Incorporated for a typical year are as follows: Product Units Sold Sales Mix A 13 , 2 24 36% B 4 , '3 56 20 Tota l 22 , I" 80 130% Assume the following unit selling prices and unit variable costs: Contribution Product Selling Price Variable Cos-t Margin A $ 8? $ ?2 $ 15 B 14-? 19? 4-6 Fixed costs are $414,000 per year. Assume that the sales mix, expressed in terms of relative physical units sold, is constant as sales volume changes. Required: 1. Determine the brea keven point in total units and, for this breakeven point, calculate the number of units of A and B that must be sold. Use the weightedaverage contribution margin approach. 3. Determine the overall breakeven point in terms of sales dollars based on the weighted-average contribution margin ratio [CMR]. (Hint: The weights for calculating the weightedaverage CMR are based on relative sales dollars, not units, of the two products.) Break down the total sales dollars breakeven point into sales dollars for product A and sales dollars for product B. 5. Assume the original facts except that now fixed costs are expected to be $41,400 higher than originally planned. How does this expected increase in fixed costs affect the breakeven point in units":I How does the percentage change in the brea keven point compare to the percentage increase in xed costs? Complete this question by entering your answers in the tabs below. Required 1 Required 3 Required 5 Determine the breakeven point in total units and, for this breakeven point, calculate the number of units of A and B that must be sold. Use the weightedaverage contribution margin approach. (Round your answer up to the nearest whole number.) Overall break-even point in units Breakeven sales in units for Product A Breakeven sales in units for Product ElStep by Step Solution
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