Question

Rapido Quadcopters plans to sell a standard quadcopter (toy drone) for $54 and a deluxe quadcopter for $64. Rapido purchases the standard quadcopter for $34 and the deluxe quadcopter for $44. Management expects to sell two deluxe quadcopters for every three standard quadcopters. The company's monthly fixed expenses are $22,000. How many of each type of quadcopter must Rapido sell monthly to breakeven? To earn $11,000? Total Standard Deluxe $ 54 $ Sale price per unit 64 (34) (44) Variable expense per unit Deduct: Contribution margin per unit $ 20 $ 5 2 Sales mix in units $ 40 100 60 $ Contribution margin $ 20 Weighted average contribution margin per unit How many of each type of quadcopter must Rapido sell monthly to breakeven? 990 standard quadcopters and 0 deluxe quadcopters to breakeven. Rapido must sell Enter any number in the edit fields and then click Check Answer. > LO 20

Answer 1

Break even point (in units) = Fixed cost/Weighted average contribution margin per unit

= 22,000/20

= 1,100

Break even quantity of standard quad copters = 1,100 x 3/5

= 660

Break even quantity of deluxe quad copters = 1,100 x 2/5

= 440

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