Question

Sales mix and break-even analysis Conley Company has fixed costs of $12,483,000. The unit selling price, variable cost per unit, and contribution margin per unit for the company's two products follow: Product Selling Price Variable Cost per Unit Contribution Margin per Unit Yankee $150 $90 $60 Zoro 270 220 50 The sales mix for products Yankee and Zoro is 70% and 30%, respectively. This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the question below.

a. Product Model 94 ____ units

b. Product Model 81 ____ units

Answer 1

Break even point in units:

Yankee: 153,300

Zoro: 65,700

Step-by-step explanation:

weighted Yankee contribution: $ 60 x 70% = $ 42

weighted Zoro contribution: $ 50 x 30% = $ 15

Mix contribution: $ 57

Then, calcualte the break even point at which the company afford his 12,483,000 fixed cost:

`(Fixed\:Cost)/(Contribution \:Margin) = Break\: Even\: Point_(units)`

12,483,000 / 57 = 219,000 sales mix units

we now assing the weight to each one:

Yankee: 219,000 x 70% = 153,300

Zoro: 219,000 x 30% = 65,700