Question

UP Forklifts sells two products, large forklifts and small forklifts. A large forklift sells for $80,000 per unit with variable costs of $24,000 per unit. Small forklifts sell for $60,000 per unit with variable costs of $11,000 per unit. Total fixed costs for the company are $3,528,000. UP Forklifts typically sells one large forklift for every four smalls. What is the breakeven point in total units

Answer 1

The break-even point in total units is 70

Step-by-step explanation:

Particulars Large Fork Lift Small Fork Lift Total

Selling price Per Unit $80,000 $60,000

Less: Variable Cost Per Unit $24,000 $11,000

Contribution per unit $56,000 $49,000

Sales Mix 1 4

Total Contribution per $56,000 $196,000 $252,000

sales mix

Contribution per unit of sales mix ($252000/5) $50,400

Fixed Costs $3,528,000

Break-even point in total units ($3,528,000 / 50,400) 70