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Brief Exercise 6-8 NoFly Corporation sells three different models of a mosquito “zapper.” Model A12 sells...

Brief Exercise 6-8

NoFly Corporation sells three different models of a mosquito “zapper.” Model A12 sells for $60 and has variable costs of $43. Model B22 sells for $111 and has variable costs of $79. Model C124 sells for $402 and has variable costs of $309. The sales mix of the three models is A12, 60%; B22, 27%; and C124, 13%.

If the company has fixed costs of $225,789, 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-even units
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Answer

Model A12

Model B22 Model C124
Sellig price $                       60 $           111 $             402
Variable costs $                       43 $             79 $             309
Contribution mergin $                       17 $             32 $               93
Weighted average contribution margin = (17*60%)+(32*27%)+(93*13%)= 30.93
Total break even units = Fixed costs/Weighted average contribution margin
225789/30.93=            7,300
Units to break even:
Model A12                      4,380 7300*60%
Model B22                      1,971 7300*27%
Model C124                         949 7300*13%

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