Question

Conley Company has fixed costs of $20,445,000. 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 $295 $160 $135 Zoro 215 140 75 The sales mix for products Yankee and Zoro is 20% and 80%, 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. Open spreadsheet Determine the break-even point in units of Yankee and Zoro of the overall (total) product, E. If required, round your answers to the nearest whole number. Product Yankee: units Product Zoro: units

Answer 1

Yankee Zoro

Break-even units 47000 188000

Step-by-step explanation:

Break even for multiple products = Total fixed costs/ (weighted average selling price- weighted average variable cost)

weighted average selling price = ($295 * 20%) + ( $215 *80%) = 59+172=$231

Weighted average variable cost = ($160 * 20%) +( $140*80%)=32+112=$144

weighted average contribution = $231-$144 = $87

breakeven = $20,445,000/$87= 235000 units

for Yankee = 235000*20%= 47000

for Zoro = 235000*80%= 188000