Question

6.6 (LO 2), AP Yard Tools lawnmowers unit contribution margin are as follows. s manufactures lawnmowers, weed-trimmers, and chainsaws. Its sales mix and pute break-even point n unts for acompany with more than one produt Sales Mix Unit Contribution Lawnmowers Weed-trimmers Chainsaws 20% 50% 30% $30 $20 $40 Yard Tools has fixed costs of $4,200,000 Instructions Compute the number of units of each product that Yard Tools must sell in order to break even under this product mix. Tanek Industries manufactures and sells three different models of wet-dry shop vacuum cleaners. Although the shop vacs vary in terms of quality and features, all are good sellers. Tanek is currently operating at full capacity with limited machine time. Determine sales mix with limited resources. sales and production information relevant to each model follows. Selling price Variable costs and expenses Machine hours required Economy $30 $16 0.5 Product Standard $50 $20 0.8 Deluxe $100 $46 1.6 Instructions a. Ignoring the machine time constraint, which single product should Tanek Industries produce? b. What is the contribution margin per unit of limited resource for each product? c. If additional machine time could be obtained, how should the additional time be used?

Answer 1

Break even point is a situation where there is no profit and no loss that is to say the sales revenue = costs.

formula to calculate it in units is Fixed cost÷ contribution per unit.

contribution per unit= selling price per unit - variable costs per unit.
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