Homework Answers
Answer 1.
Sales Mix = 1,000 : 500
Sales Mix = 2 : 1
Weighted Average Contribution Margin per unit = (2/3) * $10 +
(1/3) * $28
Weighted Average Contribution Margin per unit = $16
Overall Break-even Point in units = Overall Fixed Costs /
Weighted Average Contribution Margin per unit
Overall Break-even Point in units = $33,600 / $16
Overall Break-even Point in units = 2,100
Break-even Point in units for Vases = 2,100 * (2/3)
Break-even Point in units for Vases = 1,400
Break-even Point in units for Figurines = 2,100 * (1/3)
Break-even Point in units for Figurines = 700
Answer 2.
Overall Fixed Costs = $33,600 + $5,280
Overall Fixed Costs = $38,880
Sales Mix = 2,000 : 1,000
Sales Mix = 2:1
Weighted Average Contribution Margin per unit = (2/3) * $10 +
(1/3) * $28
Weighted Average Contribution Margin per unit = $16
Overall Break-even Point in units = Overall Fixed Costs /
Weighted Average Contribution Margin per unit
Overall Break-even Point in units = $38,880 / $16
Overall Break-even Point in units = 2,430
Break-even Point in units for Vases = 2,430 * (2/3)
Break-even Point in units for Vases = 1,620
Break-even Point in units for Figurines = 2,430 * (1/3)
Break-even Point in units for Figurines = 810
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Patterson Products Inc. is considering an upgrade to its
manufacturing equipment. The two upgrade options under
consideration are shown below.
Option 1
Option 2
Direct material cost per unit
$
93.6
$
62.4
Direct labour cost per unit
$
66
$
59
Variable overhead per unit
$
27.6
$
55.4
Fixed manufacturing costs
$
2,160,000
$
5,592,000
The selling price of the company’s product is $312 per unit with
variable selling costs of 10% of sales. Fixed selling and
administrative...
2. Assume if the company uses the new material, determine its new break-even point in both sales units and sales dollars of each individual product. (Round composite units up to next whole number.) 2. Determine its break-even point in both sales units and sales dollars of each individual product Determine the selling price per composite unit. Ratio Selling price per unit Total per composite unit Red 4 White 5 Blue 2 Determine the variable costs per composite unit. Ratio Variable...
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