Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Most businesses sell several products at varying prices. The products often have dlfferent unit varlable costs. Thus, the total profit and the breakeven point depend
Most businesses sell several products at varying prices. The products often have dlfferent unit varlable 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
varlous products sold by a firm. Assume that the sales of Jordan Incorporated for a typical year are as follows:
Assume the following unit selling prices and unit varlable costs:
Fixed costs are $ per year. Assume that the sales mlx expressed in terms of relatlve physical units sold, Is constant as sales
volume changes.
Requlred:
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.
Determine the overall breakeven point In terms of sales dollars based on the weightedaverage contribution margin ratio CMR
Hint: The weights for calculating the weightedaverage CMR are based on relatlve 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?
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
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
Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started