Exercise 18-22 CVP analysis using composite units LO P4 Handy Home sells windows and doors in the ratio of 8:2 (windows:doors). The selling price of each window is $200 and of each door is $500. The variable cost of a window is $125 and of a door is $350. Fixed costs are $900,000. X Answer is not complete. (1) Determine the selling price per composite unit. Quantity Selling Price per unit Windows 8 $ 200.00 Total per composite unit $1,600.00 Doors 2 500.00 1,000.00 $2,600.00 (2) Determine the variable costs per composite unit. Quantity Variable costs per unit Windows 8 $ 125.00 Doors 350.00 Total per composite unit $1,000.00 700.00 $1,700.00 Contribution margin per composite unit Sales $ 2,600.00 1,700.00 Less: Variable costs Contribution margin (3) Determine the break-even point in composite units. Choose 1 Choose Denominator: Numerator: Total fixed costs Contribution margin per 1 unit Break even units Break even units $ 900,000 / $ 9.00 X = 100,000 composite units (4) Determine the number of units of each product that will be sold at the break-even point. Quantity Number of composite units Unit sales at break-even to break even. point Doors 2 350.00 700.00 $1,700.00 Contribution margin per composite unit Sales 2,600.00 Less: 1,700.00 Variable costs Contribution margin (3) Determine the break-even point in composite units. Choose Choose Denominator: Numerator: Contribution margin per Total fixed costs / unit Break even units Break even units $ 900,000 / $ 9.00 X 100,000 composite units (4) Determine the number of units of each product that will be sold at the break-even point. Number of composite units Unit sales at break-even Quantity to break even. point Windows 8 8,000 Windows Doors 2 1 2,000 Doors Total 10,000 Total