Question
Vernon Company manufactures two products. The budgeted per-unit contribution margin for each product follows: Super Supreme Sales price $ 95 $ 135 Variable cost per
Vernon Company manufactures two products. The budgeted per-unit contribution margin for each product follows:
| Super | Supreme | |||||||
| Sales price | $ | 95 | $ | 135 | ||||
| Variable cost per unit | (69 | ) | (87 | ) | ||||
| Contribution margin per unit | $ | 26 | $ | 48 | ||||
Vernon expects to incur annual fixed costs of $127,680. The relative sales mix of the products is 80 percent for Super and 20 percent for Supreme.
Required
-
Determine the total number of products (units of Super and Supreme combined) Vernon must sell to break even.
-
How many units each of Super and Supreme must Vernon sell to break even?
(For all requirements, do not round intermediate calculations.)
units a. Total number of products b. Product Super Product Supreme units unitsStep by Step Solution
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Intermediate Accounting
Authors: Loren A. Nikolai, John D. Bazley, Jefferson P. Jones
11th edition
978-0538467087, 9781111781262, 538467088, 1111781265, 978-0324659139
