Sales Mix and Break-Even AnalysisHeyden Company has fixed costs of $399,970. The unit selling price, variable cost per unit, and contribution margin per unit for thecompany's two products followProduct Selling Price Variable Cost per UnitContribution Margin per Unit$100QQ$180$80240220zz20The sales mix for Products QQ and ZZ is 45% and 55%, respectively. Determine the break-even point in units of QQ and ZZ. Ifrequired, round your answers to the nearest whole number.a. Product QQunitsb. Product ZZunits

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Asked Oct 31, 2019
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Sales Mix and Break-Even Analysis
Heyden Company has fixed costs of $399,970. The unit selling price, variable cost per unit, and contribution margin per unit for the
company's two products follow
Product Selling Price Variable Cost per Unit
Contribution Margin per Unit
$100
QQ
$180
$80
240
220
zz
20
The sales mix for Products QQ and ZZ is 45% and 55%, respectively. Determine the break-even point in units of QQ and ZZ. If
required, round your answers to the nearest whole number.
a. Product QQ
units
b. Product ZZ
units
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Sales Mix and Break-Even Analysis Heyden Company has fixed costs of $399,970. The unit selling price, variable cost per unit, and contribution margin per unit for the company's two products follow Product Selling Price Variable Cost per Unit Contribution Margin per Unit $100 QQ $180 $80 240 220 zz 20 The sales mix for Products QQ and ZZ is 45% and 55%, respectively. Determine the break-even point in units of QQ and ZZ. If required, round your answers to the nearest whole number. a. Product QQ units b. Product ZZ units

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Step 1

Break even sales is the dollar amount of revenue at which a business earns a profit of zero i.e. No Profit No Loss. This sale amount exactly covers the underlying fixed costs of a business, plus all the variable costs associated with the sales.

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Break-even Units Fixed Cost Contribution per unit In case of Sales the break-even units = Fixed Cost Weighted Contribution Margin per unit

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Step 2

Computation of Weighted Average Contribution

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Computation of Weighted Average contribution Contribution Per unit Particulars Sales Mix Weights QQ 80 45% 36 ZZ 20 55% 11 Wighted Average Contribution 47

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Step 3

Computation of Break-eve...

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Break-even units Fixed Cost Weighted Contribution Margin per unit = 399,970 47 8,510 units QQ 8510 45% = 3,829.5 units ZZ 8510 55%= 4,681.5 units

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