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QUESTION 25 Carter Co. sells two products, Arks and Bins. Last year, Carter sold 14,000 units of Arks and 56,000 units of Bin
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Answer #1

Carter unit sold ratio of Arks and Bins

= 14,000 : 56,000

= 1 : 4

Weighted average contribution margin per unit in 1 : 4 ratio

= ($40 * 1 + $20 * 4) / (1 + 4)

= ($40 + $80) / 5

= $120 / 5

= $24

Break even point in units = Fixed cost / weighted average contribution margin per unit

= $960,000 / $24

= 40,000 units

40,000 units is the break even point.

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