Question

Elise Corporation has the following sales mix for its three products: A, 20%; B, 35%; and C, 45%. Fixed costs total $400,000 and the weighted-average contribution margin is $100. How many units of product A must be sold to break-even? 20,000. None of the answers is correct. 4,000. 800. Cannot be determined based on the information presented.

Answer 1

800 units of product A must be sold for break-even

Step-by-step explanation:

Given, weighted-average contribution is $100.

Total break-even units = Total fixed cost / Weighted-average contribution

Total break-even units = $400,000 / $100

Total break-even units = 4,000 units

Product A break-even = 4,000 x 20%

Product A break-even = (800 units)

Hence, the correct answer is 800 units.