Question

Shore Co. sells two products, kayaks and motors. Last year, Shore sold 12,600 units of kayaks and 23,400 units of motors. Related data are as follows: Product Unit Selling Price Unit Variable Cost Unit Contribution Margin Kayaks $120 $80 $40 Motors 80 60 20 Assuming that last year's fixed costs totaled $910,035, what was Shore Co.'s break-even point in units

Answer 1

Break-even points in units is 33,705.00

Step-by-step explanation:

Break-even point in units=fixed costs/weighted average selling price-weighted average variable cost

Kayaks 12,600

Motors 23,400

total 36,000

kayaks sales mix=12,600/36,000=0.35

Motors sales mix =23,400/36,000=0.65

weighted average selling price=$120*0.35+$80*0.65

=$42+$52

=$94

weighted average variable cost=$80*0.35+$60*0.65

=$28+$39

=$67

fixed costs is $910,035

break-even points in units=$910,035/($94-$67)

= 33,705.00

The mix of both Kayaks and Motors that would gives no profit no loss is 33,705.00