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Most businesses sell several products at varying prices. The products often have different unit variable costs. Thus, the total profit and the breakeven point depend
Most businesses sell several products at varying prices. The products often have different unit variable costs. Thus, the total profit and the breakeven point depend on the proportions in which the products are sold. Sales mix is the relative contribution of sales among various products sold by a firm. Assume that the sales of Jordan Incorporated for a typical year are as follows:
Product Units Sold Sales Mix
A
B
Total
Assume the following unit selling prices and unit variable costs:
Product Selling Price Variable Cost Contribution Margin
A $ $ $
B
Fixed costs are $ per year. Assume that the sales mix, expressed in terms of relative physical units sold, is constant as sales volume changes.
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.
Determine the overall breakeven point in terms of sales dollars based on the weightedaverage contribution margin ratio CMRHint: 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
Assume the original facts except that now fixed costs are expected to be $ 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?Determine the breakeven point in total units and, for this breakeven point, calculate the number of units of A and that must
be sold. Use the weightedaverage contribution margin approach. Round your answer up to the nearest whole number.Determine the breakeven point in total units and, for this breakeven point, calculate the number of units of A and that must
be sold. Use the weightedaverage contribution margin approach. Round your answer up to the nearest whole number.
Complete this question by entering your answers in the tabs below.
Determine the overall breakeven point in terms of sales dollars based on the weightedaverage contribution margin ratio
CMRHins: 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
Do not round intermediate calculations, Round your final answers to the nearest whole dollar amount.
Complete this question by entering your answers in the tabs below.
Assume the original facts except that now fixed costs are expected to be $ 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?
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