Question

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 1

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%