Answered step by step
Verified Expert Solution
Link Copied!
Question
1 Approved Answer

Zwier Company can produce two types of carpet cleaners, Brighter and Cleaner. Data on these two products are as follows: Brighter Cleaner Sales volume in

Zwier Company can produce two types of carpet cleaners, Brighter and Cleaner. Data on these two products are as follows:

Brighter

Cleaner

Sales volume in units

400

600

Unit sales price

$1,000

$1,000

Unit variable cost

200

700

The number of machine hours to produce one unit of Brighter is 1, while the number of machine hours for each unit of Cleaner is 2. Total fixed costs for the manufacture of both products are $270,000.

Required:

1. Determine the breakeven point in total units for Zwier Company, assuming that the sales mix (on the basis of relative sales volume in units) remains constant. Use the weighted-average contribution margin approach.

2. At this breakeven level, how many units of each product must be sold? Due to rounding, the total breakeven units for Requirement 2 may differ slightly than in Requirement 1.

3. Using the Indirect approach, what is the overall breakeven point in sales dollars? Use the breakeven units computed in Requirement 1.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image
Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_step_2

Step: 3

blur-text-image_step3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students explore these related Accounting questions