Question

Sales Mix and Break-Even Analysis

Conley Company has fixed costs of $17,802,000. The unit selling price, variable cost per unit, and contribution margin per unit for the company’s two products follow:

Product Model	Selling Price		Variable Cost per Unit			Contribution Margin per Unit
Yankee	$180		$99			$81
Zoro	225		135			90

The sales mix for products Yankee and Zoro is 80% and 20%, respectively. Determine the break-even point in units of Yankee and Zoro.

1 eBook Show Me How Sales Mix and Break-Even Analysis Conley Company has fixed costs of $17,802,000. The unit cost per unit, and contribution margin per unit for the company's two products follow: 33 Product Model Selling Price Variable Cost per Unit Contribution Margin per Unit Yankee $180 $99 $81 Zoro 225 1 35 The sales mix for products Yankee and Zoro is 80% and 20%, respectively. Determine the break-even point in units of Yankee and Zoro. a. Product Model Yankee units b. Product Model Zoro units Feedback Check My Wort Subtract the combined unt variable cost from the combined unit selling price Divide the fixed costs by the combined unit contribution margin to find break even point in units Units for Yankee and Zoro will be break-even point in units times the sales mix percentages for each Check My Work < Previous Next > Save and be submit Assignment for Grading

Answer 1

Fixed costs	17802000
Divide by Weighted Unit Contribution margin	82.80	=(81*80%)+(90*20%)
Overall break even point	215000
a. Product Model Yankee	172000 units	=215000*80%
b. Product Model Zoro	43000 units	=215000*20%