Question

NoFly Corporation sells three different models of a mosquito “zapper.” Model A12 sells for $61 and has variable costs of $43. Model B22 sells for $102 and has variable costs of $78. Model C124 sells for $406 and has variable costs of $307. The sales mix of the three models is A12, 55%; B22, 29%; and C124, 16%.

If the company has fixed costs of $238,710, how many units of each model must the company sell in order to break even? (Round Per unit values to 2 decimal palces, e.g. 15.25 and final answers to 0 decimal places, e.g. 5,275.)

Model

A12 =

B22=

C124=

Total break-ever ________ units

Answer 1

Answer:
Particulars	Model A12	Model B22	Model C124
Selling price per unit	$ 61	$ 102	$ 406
Less: Variable costs per unit	($ 43)	($ 78)	($ 307)
Contribution margin per unit	$ 18	$ 24	$ 99
Weighted-Average Contribution Margin per Unit          = ( $ 18 x 55% ) + ( $ 24 x 29% ) + ( $ 99 x 16% )          =    $ 9.90 + $ 6.96 + $ 15.84          =    $ 32.70
Total Break Even            = Fixed Cost / Weighted-Average Contribution Margin per Unit            = $ 238,710 / $ 32.70	7,300 Units
Model
A12 ( 7,300 x 55% )	4,015
B22 ( 7,300 x 29% )	2,117
C124 ( 7,300 x 16% )	1,168