Question

Gabe industries sells two products, Bsaic models and deluxe models. basic models sell for $41 per unit with variable costs of $15 per unit. Deluxe models sell for $45 per unit with variable costs of $45 per unit. total fixed costs for the company are $1,310.40. Gabe industries typically sells four basic models for every deluxe model what is the breakeven point in total units?

a. 50 units
b. 63 units.
c. 29 units.
d.32 units

Answer 1

The answer is: B) 63 units

Step-by-step explanation:

contribution margin per basic model = $41 - $15 = $26

contribution margin per deluxe model = $45 - $45 = $0

Break even point = total fixed costs / contribution margin basic model = $1,310.40 / 26 = 50.4 units

If Gabe industries produces 63 units;

• 51 units of basic model = 81% of total production
• 12 units of deluxe model = 19% of total production