Question

Patriot Co. manufactures and sells three products: red, white, and blue. Their unit selling prices are red, $60; white, $90;
1. Determine its break-even point in both sales units and sales dollars of each individual product. Determine the selling pri
2. Assume if the company uses the new material, determine its new break-even point in both sales units and sales dollars of e
2. Determine its break-even point in both sales units and sales dollars of each individual product. Determine the selling pri
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Answer #1

1.

Determine the selling price per composite unit.
Ratio Selling price per unit Total per composite unit
Red 4 60 240
White 5 90 450
Blue 2 115 230
920
Determine the variable costs per composite unit.
Ratio Variable cost per unit Total per composite unit
Red 4 45 180
White 5 65 325
Blue 2 85 170
675
Determine the break-even point in composite units.
Choose Numerator: / Choose Denominator: = Break even units
Fixed costs / Contribution per unit = Break even units
155000 / 245 = 633

2.

Determine the selling price per composite unit.
Ratio Selling price per unit Total per composite unit
Red 4 60 240
White 5 90 450
Blue 2 115 230
920
Determine the variable costs per composite unit.
Ratio Variable cost per unit Total per composite unit
Red 4 30 120
White 5 40 200
Blue 2 70 140
460
Determine the break-even point in composite units.
Choose Numerator: / Choose Denominator: = Break even units
Fixed costs / Contribution per unit = Break even units
180000 / 460 = 391
Number per composite unit Number per composite units to break even Units sales at the break even point Dollar sales at the break even point
Red 4 391 1565 93913
White 5 391 1955 175950
Blue 2 391 782 89930
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