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BACK Question 21 illy Companys sales mix is 3 units of A, 2 units of B, and 1 unit of C. Selling prices for each product are $20, $ respectively. Fixed costs are $320,000. what is the break-even point in composite units? $30, and $40, respectively, Variable costs per unit are $12, 18, and $24, O 1,111 O 1,600 2,666 5,000 INK TO TEXT SAVE FOR LATER Question Attempts: 0 of 1 used
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Answer #1

Break Even Point in Composite Units

Break Even Point in Composite Units = Total Fixed Costs / Total Contribution Margin

Contribution Margin of composite units = (Selling Price per unit – Variable Cost per unit) x Sales Mix

= [($20 - $12) x 3] + [($30 - $18) x 2] + [($40 - $24) x 1]

= $24 + $24 + $16

= $64 per unit

Therefore, The Break Even Point in Composite Units = Total Fixed Costs / Total Contribution Margin

= $320,000 / $64 per unit

= 5,000 Units

“Hence, The Answer is 5,000”

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