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Steven Company has fixed costs of $239,080. The unit selling price, variable cost per unit, and...

Steven Company has fixed costs of $239,080. The unit selling price, variable cost per unit, and contribution margin per unit for the company's two products are provided below.

Product Selling Price
per unit		 Variable Cost
per unit		 Contribution Margin
per unit
X $1,248 $468 $780
Y 473 253 220

The sales mix for products X and Y is 60% and 40% respectively. Determine the break-even point in units of X and Y combined. Round answer to nearest whole number.
units

Solutions

Expert Solution

Answer
Contribution margin per unit (a) Sales mix (b) Weighted Contribution margin (a*b)
Product X $                                              780 60% $     468
Product Y $                                              220 40% $       88
Weighted Contribution margin $     556
Break even point in units (Total company)   =   Total fixed cost/ Weighted contribution margin
$239080 / $556
430 units
Break even point of particular products   =    Break even point in units for Total company * Sales mix
Product X 430 * 60%
258 units
Product Y 430 * 40%
172 units

ekkarill92 answered 2 years ago
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