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x Brief Exercise 19-8 Your answer is incorrect. Try again. NoFly Corporation sells three different models...

x

Brief Exercise 19-8

Your answer is incorrect. Try again.

NoFly Corporation sells three different models of a mosquito “zapper.” Model A12 sells for $58 and has variable costs of $41. Model B22 sells for $102 and has variable costs of $75. Model C124 sells for $413 and has variable costs of $316. The sales mix of the three models is A12, 58%; B22, 27%; and C124, 15%.

If the company has fixed costs of $208,269, 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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Solutions

Expert Solution

A12 B22 C124
Unit selling price $                  58 $                102 $              413
Unit variable cost $                  41 $                  75 $              316
Unit contribution margin $                  17 $                  27 $                97
Sales mix 58% 27% 15%
Weighted average CM = 17*58%+27*27%+97*15% = $            31.70
Break even point in composite units = Fixed costs/Weighted average CM per unit = 208269/31.70 = 6570 Composite Units
Number of units of individual products A12 B22 C124 `Total
to be sold = 6570*% in sales mix = 3811 1774 986 6570

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