Question

Vaughn Manufacturing has a weighted-average unit contribution margin of $30 for its two products, Standard and Supreme. Expected sales for Vaughn are 60000 Standard and 40000 Supreme. Fixed expenses are $1500000. How many Standards would Vaughn sell at the break-even point?

Answer 1

30,000 units

Step-by-step explanation:

The computation of the break even point is shown below:

But before that we need to do the following calculations

Standard product sales mix % is

= 60,000 ÷ (60,000 + 40,000)

= 60,000 ÷ 100,000

= 60%

Total Break even in units is

= $1,500,000 ÷ $30

= 50,000

Now

Break even units for Standard product is

= 50000 x 60%

= 30,000 units