Question
Sales Mix and Break-Even Analysis Heyden Company has fixed costs of $773,480. The unit selling price,...
Sales Mix and Break-Even Analysis Heyden Company has fixed costs of $773,480. The unit selling price, variable cost per unit, and contribution margin per unit for the company's two products follow: Product Selling Price Variable Cost per Unit Contribution Margin per Unit QQ $240 $160 $80 ZZ 300 160 140 The sales mix for Products QQ and ZZ is 30% and 70%, respectively. Determine the break-even point in units of QQ and ZZ. If required, round your answers to the nearest whole number. a. Product QQ units b. Product ZZ units
Answers
ANSWER:
Calculation of break even point in units:
Break even point in units= Fixed cost/ contribution per unit
Contribution per unit=80*0.30+140*0.70= $122
Break even point= 773480/122= 6340 units
a) Product QQ= 6340*0.30= 1902 units
b) Product ZZ= 6340*0.70=4438 units
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