Question

The selling price of each window is $105 and of each doo $255. The variable cost of a window is $65.00 and of a door is $177.50. Fixed costs are $640,625. (Enter your "per unit' values In t decimal places.) QuantitySelling Price per unit Total per composite unit Doors 2) Determine the variable costs per composito unit Variable costs per unit Total per composite unit Windows Doors Contribution margin per composite unit 0.00 0.00 Contribution margin ) Determine the break-oven point in Break Even Units

Answer 1

The computation is shown below:

Step-by-step explanation:

The computation is shown below:

1. Selling price per component unit

Particulars Quantity Selling price per unit Total per composite unit

Windows 7 $105 $735

Doors 3 $255 $765

Selling price per component units $1,500

2. Variable cost per component unit

Particulars Quantity Variable cost per unit Total per composite unit

Windows 7 $65 $455

Doors 3 $177.50 $532.50

Variable cost per component units $987.50

Now the Contribution margin per composite unit is

= Selling price per component units - Variable cost per component units

= $1,500 - $987.50

= $512.50

And, the break-oven point in Break Even Units is

= Fixed cost ÷ Contribution margin per composite unit

= $640,625 ÷ $512.50

= 1,250 units

We need to applied the above formulas