Question

Bonita industries sells two types of computer hard drives. the sales mix is 30% (q-drive) and 70% (q-drive plus). q-drive has variable costs per unit of $60 and a selling price of $120. q-drive plus has variable costs per unit of $75 and a selling price of $165. bonita's fixed costs are $891000. how many units of q-drive would be sold at the break-even point?

Answer 1

3300 units of q - drive.

To get the break even units of q drive you need to get the weighted average contribution margin of the two products

To get it, simply multiply the sales mix ratio to its contribution margin per product and add the two to get the wacm.

Q-drive cm=$120-60=60*30%
Q-drive plus cm= $165-75*70%

the wacm=$81
then divide the fixed cost by the wacm

$891000 / $81=11000 units

then to get the break even units of q-drive simply multiply the sales mix ratio to the break even units

11000 units*30% =3300 units.