Mayfield Company sells two products, Blue models and Plaid models. Blue models sell for $44 per unit with variable costs of $35 per unit. Plaid models sell for $55 per unit with variable costs of $40 per unit. Total fixed costs for the company are $12,000. Mayfield Company typically sells fourBlue models for every three Plaid models. What is the breakeven point in total units? (Round any intermediary calculations to the nearest whole number.)O A. 148 unitsO B. 1,714 unitsO C. 1,000 unitsO D. 267 units

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Asked Oct 20, 2019
Mayfield Company sells two products, Blue models and Plaid models. Blue models sell for $44 per unit with variable costs of $35 per unit. Plaid models sell for $55 per unit with variable costs of $40 per unit. Total fixed costs for the company are $12,000. Mayfield Company typically sells four
Blue models for every three Plaid models. What is the breakeven point in total units? (Round any intermediary calculations to the nearest whole number.)
O A. 148 units
O B. 1,714 units
O C. 1,000 units
O D. 267 units
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Mayfield Company sells two products, Blue models and Plaid models. Blue models sell for $44 per unit with variable costs of $35 per unit. Plaid models sell for $55 per unit with variable costs of $40 per unit. Total fixed costs for the company are $12,000. Mayfield Company typically sells four Blue models for every three Plaid models. What is the breakeven point in total units? (Round any intermediary calculations to the nearest whole number.) O A. 148 units O B. 1,714 units O C. 1,000 units O D. 267 units

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Expert Answer

Step 1

Compute the contribution margin.

 

Particulars
Plaid Models
Blue Models
Total
Sales
Variable cost
$55
$40
$15
$44
$35
Contribution margin
(a)
Sales mix units (b
Contribution margin
(ax b)
$9
4
$81
$45
$36
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Particulars Plaid Models Blue Models Total Sales Variable cost $55 $40 $15 $44 $35 Contribution margin (a) Sales mix units (b Contribution margin (ax b) $9 4 $81 $45 $36

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Step 2

Calculate the weighted contribution margin per unit.

Weighted contributi on
Total contribution margin
margin per unit
Total sales mix
$81
7
-$12
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Weighted contributi on Total contribution margin margin per unit Total sales mix $81 7 -$12

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Step 3

Calculate the break-even po...

Fixed cost
Break-even in units
Weighted contribution
(margin per unit
$12,000
$12
1,000 units
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Fixed cost Break-even in units Weighted contribution (margin per unit $12,000 $12 1,000 units

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