Part B

GH Artist Supply, Inc. is a new company that specializes in panels and frames for artists.

In a new product line, GH managers plan to create new, eco-friendly panels in three sizes: large, medium, and small.

The current budget plan for the first year of operations provides the following information:

	Small	Medium	Large
# of units	200	110	80
Selling price per unit	$20	$45	$90
Variable cost per unit	$14	$18	$31
Fixed costs	$5,000	$2,800	$2,200

Required

Two managers within GH are arguing about the best way to calculate the break-even point in this multi-product scenario. Each has their own method they would like to use.

Compute the break-even point using the two common methods used for multi-product scenarios.

For each method, describe the assumption that is unique to that method.