Question

Brief Exercise 19-8 NoFly Corporation sells three different models of a mosquito apper"Model A12 for $60 and has variable costs of 541. Model 22 sells for $108 and has variable costs of $76. Model C124 sells for $405 and has variable costs of $313. The sales of the three models is A12, 589; 322,30% and C124, 12% If the company has fixed costs of $233,967, how many units of each model must the company sell in order to break even? (Round Per unit values to 2 decimal palces, e.g. 15.25 and final answers to decimal places, e.g. 5,275.) Model A12 B22 C124 Total break-even units Click if you would like to show Work for this questions Open Show Work

Answer 1

Contribution margin per unit = Selling price per unit - Variable costs per unit

A12 Contribution margin per unit = $60 - $41 = $19

B22 Contribution margin per unit = $108 - $76 = $32

C124 Contribution margin per unit = $405 - $313 = $92

Weighted average contribution margin per unit = (A12 Contribution margin per unit * Sales mix) + (B22 Contribution margin per unit * Sales mix) + (C124 Contribution margin per unit * Sales mix)

= ($19 * 58%) + ($32 * 30%) + ($92 * 12%)

= $11.02 + $9.6 + $11.04

= $31.66

Break-even units = Fixed costs / Weighted average contribution margin per unit

= $233,967 / $31.66

= 7,390

Model
A12	4,286 (7,390*58%)
B22	2,217 (7,390*30%)
C124	887 (7,390*12%)