Question

new sales ratio of 63:5 units. (Round the CM ratio to 1/100th O manufactures two products 1%) T Break-even analysis. The Dooley Ca The following data are projected for the coming year Baubles and Trinkets. TANKES TOrAL Units Amount Units Amount AMOUNT 10,000 $10,0008000 $10.00 $20.000 BAUBLES $ 2.000 6.000 8.000 S 5.600 7.600 3,000 9000 8,603$16.,600 1400 3400 Fixed cost. Variable cost. Total costI Operating income. $ 2000 j The break-even sales in units for Baubles,assuming that the facilities are not jointly used sales in dollars for Trinkets, assuming that the facitiles are not jointiy Required: 1) The br Continued) used.

Answer 1

Answer to point 1-Calculation of Break even sales(units)

	Baubles	Trinkets
sales	10000	10000
Variable cost	6000	3000
Contribution	4000	7000
Units	10000	8000
Contribution/unit(B)	0.4	0.875
Fixed Cost(A)	2000	5600
Break Even Sales(Units)(A/B)	5000	6400

Point 2-Break even sales-In Dollar

Contribution Margin Ratio =	contribution	4000 *100	7000 *100
	Sales	10000	10000
	Contribution Margin Ratio(D) =	40%	70%
	Break Even Sales(Value$)(A/D)
	Fixed Cost	2000	5600
	Contribution margin ratio	40%	70%
	Break Even Sales(Value$)(A/D)	5000	8000

point 3-Composite unit contribution margin

	Baubles	Trinkets	total
Contribution	4000	7000	11000
Units	10000	8000	18000
Composite unit contribution margin(A/B)			0.61

Point 4-Break even point for both products

	Baubles	Trinkets	total
Contribution	4000	7000	11000
Units	10000	8000	18000
Composite unit contribution margin(A/B)			0.61
fixed cost	2000	5600	7600
Lets Break Even Units be X
.61*X-7600=0
on solving the above equation we get X=12459 units	12459
Sales mix	4	3	7
units	12459*4/7	12459*3/7
units	7119	5340