Question
In: Accounting
ABC Company produces and sells four products. Information about these products for 2019, the most recent...
ABC Company produces and sells four products. Information about
these products for
2019, the most recent year, appears below:
Product
A Product B Product C Product D
selling price per unit 19.00 17.00 15.00 12.00
variable costs per unit 5.00 13.00 5.00 6.00
number of units sold 37,000 32,000 14,000 29,000
ABC Company had total fixed costs of $648,000 in 2019.
Calculate the number of units of Product D that
needed to be sold in 2019 in order for
ABC Company to earn a profit of $144,000.
Solutions
Expert Solution
Correct answer--------19575 units
working
| Working | Product A | Product B | Product C | Product D | Total | |
| A | Price | $ 19.00 | $ 17.00 | $ 15.00 | $ 12.00 | |
| B | Variable Cost per unit | $ 5.00 | $ 13.00 | $ 5.00 | $ 6.00 | |
| C = A - B | Contribution Margin | $ 14.00 | $ 4.00 | $ 10.00 | $ 6.00 | |
| D | Product Mix | 33% | 29% | 13% | 26% | 100.00% |
| A | Total Fixed Cost plus profit | $ 648,000.00 |
| B | Weighted Average Contribution Margin ratio | $ 8.57 |
| C = A/B | Multi Product Break Even point | 75,600.00 |
| C x 33% | Product A | 24,975 |
| C x 29% | Product B | 21,600 |
| C x 13% | Product C | 9,450 |
| C x 26% | Product D | 19,575 |
ekkarill92 answered 1 year agoRelated Solutions
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