Question

Yard Tools manufactures lawnmowers, weed-trimmers, and chainsaws. Its sales mix and unit contribution margin are as follows.

Exercise 19-6 X Your answer is incorrect. Try again. Yard Tools manufactures lawnmowers, weed-trimmers, and chainsaws. Its sales mix and unit contribution margin are as follows. Unit Contribution Margin Sales Mix Lawnmowers $31 Weed-trimmers 20 % 50 % 30 % $25 Chainsaws $37 Yard Tools has fixed costs of $4,350,800. Compute the number of units of each product that Yard Tools must sell in order to break even under this product mix. (Use the Weighted-Average Unit Contribution Margin Ratio rounded to 2 decimal places e.g. 0.25 and round final answers to O decimal places, e.g. 2,510.) Lawnmowers 30200 units Weed-trimmers 75500 units Chainsaws 45300 units LINK TO TEXT

Answer 1

Weighted average contribution margin = (20% X $31) + (50% X $25) + (30% X $37) = $29.80

Breakeven units = $4,350,800 / $29.80 = 146,000

Number of units each product to be sold:

Lawnmowers: 146,000 X 20% = 29,200

Weed-trimmers: 146,000 X 50% = 73,000

Chainsaws: 146,000 X 30% = 43,800