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Barclay Enterprises manufactures and sells three distinct styles of bicycles: the Youth model sells for $350 and has a unit contribution margin of $130; the Adult model sells for $900 and has a unit contribution
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Barclay Enterprises manufactures and sells three distinct styles of bicycles: the Youth model sells for $350 and has a unit contribution margin of $130; the Adult model sells for $900 and has a unit contribution margin of $475; and the Recreational model sells for $1,050 and has a unit contribution margin of $525. The company's sales mix includes: 5 Youth models; 9 Adult models; and 6 Recreational models. If the firm's annual fixed costs total $6,550,000, calculate the firm's break-even point in composite units (rounded to the nearest whole unit).a. 1380 composite units. b. 8075 composite units. c. 811 composite units.d. 406 composite units. e. 16,150 composite units.

User Gogu CelMare
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22 votes
22 votes

Answer:

Break-even point in composite units = 811 units

Step-by-step explanation:

Number of modal;

5 Youth models

9 Adult models

6 Recreational models

Annual fixed costs total = $6,550,000

Find:

Break-even point in composite units

Computation:

Mixed contribution margin = 5[130] + 9[475] + 6[525]

Mixed contribution margin = 650 + 4275 + 3150

Mixed contribution margin = $8075

Break-even point in composite units = Annual fixed costs total / Mixed contribution margin

Break-even point in composite units = 6,550,000 / 8075

Break-even point in composite units = 811 units

User Angelik
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