Question

US-Mobile manufactures and sells two products, tablet computers and smartphones, in the ratio of 5:3. Fixed costs are $100,860, and the contribution margin per composite unit is $123. What number of each type of product is sold at the break-even point

Answer 1

Tablets= 512

Smartphones= 308

Step-by-step explanation:

Giving the following information:

Fixed costs are $100,860, and the contribution margin per composite unit is $123.

First, we need to calculate the break-even point in units for the whole company:

Break-even point in units= fixed costs/ contribution margin per unit

Break-even point in units= 100,860 / 123

Break-even point in units= 820

Now, for each product line:

Tablets= 5/8= 0.625

Smartphones= 3/8= 0.375

Units:

Tablets=0.625*820= 512

Smartphones= 0.375*820= 308