Question

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 cost per unit Total per composite unit Red White Blue Determine the break-even point in composite units. Choose Numerator: Choose Denominator: Break Even Units Break even units Determine its break-even point in units and sales dollars of each individual product. Number Number of composite units to break even Units sales at the Dollar sales at the break-even point per composite unit break-even point Red White Blue

Answer 1

Solution 1:

Determine the selling price per composite unit
	Ratio	Selling Price per unit		Total per composite unit
Red	4	$51		$204
White	5	$81		$405
Blue	2	$106		$212
	Total			$821
Determine the Variable cost per composite unit
	Ratio	Variable cost per unit		Total per composite unit
Red	4	$36		$144
White	5	$56		$280
Blue	2	$76		$152
	Total			$576
Break even point in Composite units
Choose numerator	/	Choose Denominator	=	Breakeven Units
Total Fixed cost	/	Composite Contribution Margin per unit	=	Breakeven Units
$1,46,000	/	$245	=	596
Determine its break even point in units and sales dollars of each individual product
	No. per composite Unit	No.of composite units to break even		Unit sales at break even	Selling Price per unit	Dollar sales at break even
Red	4	596		2384	$51	$1,21,584
White	5	596		2980	$81	$2,41,380
Blue	2	596		1192	$106	$1,26,352

Solution 2:

Determine the selling price per composite unit
	Ratio	Selling Price per unit		Total per composite unit
Red	4	$51		$204
White	5	$81		$405
Blue	2	$106		$212
	Total			$821
Determine the Variable cost per composite unit
	Ratio	Variable cost per unit		Total per composite unit
Red	4	$22		$88
White	5	$32		$160
Blue	2	$62		$124
	Total			$372
Break even point in Composite units
Choose numerator	/	Choose Denominator	=	Breakeven Units
Total Fixed cost	/	Composite Contribution Margin per unit	=	Breakeven Units
$1,62,000	/	$449	=	361
Determine its break even point in units and sales dollars of each individual product
	No. per composite Unit	No.of composite units to break even		Unit sales at break even (In ratio 4:5:2)	Selling Price per unit	Dollar sales at break even
Red	4	361		1444	$51	$73,644
White	5	361		1805	$81	$1,46,205
Blue	2	361		722	$106	$76,532