A company has the following budgeted information: Product J Product K Product L Sales volume (units)...
A company has the following budgeted information:
|
Product J |
Product K |
Product L |
||||
|
Sales volume (units) |
4,000 |
3,000 |
8,000 |
|||
|
Unit selling price |
$10 |
$12 |
$8 |
|||
|
Unit variable cost |
$8 |
$9 |
$7 |
Budgeted fixed costs for the upcoming period are $150,000.
What is the budgeted break-even in total units?
Homework Answers
Total sales = 4000+3000+8000 = 15,000
Sales mix = (4,000/15,000) : (3000/15000) : (8000/15000)
= 27% : 20% : 53%
Weighted average contribution margin
= [(10-8)*27%] + [(12-9)*20%] + [(8-7)*53%)]
= 1.67
Breakeven point = Fixed cost/Weighted-average contribution margin
= 150,000/1.67
= 89,820 units (rounded)
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