Sales Mix and Break-Even Analysis Michael Company has fixed costs of $1,743,070. 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 $720 $380 $340 QQ 160 ZZ 520 360 The sales mix for Products QQ and ZZ is 55% and 45%, respectively. Determine the break-even point in units of QQ and ZZ. If required, round your answers to the nearest whole number. X units a. Product QQ 8,056 b. Product ZZ X units 6,591

Sales Mix and Break-Even Analysis Michael Company has fixed costs of $1,743,070. 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 $720 $380 $340 QQ 160 ZZ 520 360 The sales mix for Products QQ and ZZ is 55% and 45%, respectively. Determine the break-even point in units of QQ and ZZ. If required, round your answers to the nearest whole number. X units a. Product QQ 8,056 b. Product ZZ X units 6,591

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter6: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 5BE

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Lotts Company produces and sells one product. The selling price is 10, and the unit variable cost is 6. Total fixed cost is 10,000. Required: 1. Prepare a CVP graph with Units Sold as the horizontal axis and Dollars as the vertical axis. Label the break-even point on the horizontal axis. 2. Prepare CVP graphs for each of the following independent scenarios: (a) Fixed cost increases by 5,000, (b) Unit variable cost increases to 7, (c) Unit selling price increases to 12, and (d) Fixed cost increases by 5,000 and unit variable cost is 7.
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Manatoah Manufacturing produces 3 models of window air conditioners: model 101, model 201, and model 301. The sales price and variable costs for these three models are as follows: The current product mix is 4:3:2. The three models share total fixed costs of $430,000. Calculate the sales price per composite unit. What is the contribution margin per composite unit? Calculate Manatoahs break-even point in both dollars and units. Using an income statement format, prove that this is the break-even point.
Abilene Industries manufactures and sells three products (XX, W, and ZZ). The sales price and unit variable cost for the three products are as follows: Their sales mix is reflected as a ratio of 4:2:1. Annual fixed costs shared by the three products are $345.000 per year. What are total variable costs for Abilene with their current product mix? Calculate the number of units of each product that will need to be sold in order for Abilene to break even. What is their break-even point in sales dollars? Using an income statement format, prove that this is the break-even point.
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