Homework Answers
Ans:
| Break even point in units | Fixed costs / weighted average contribution margin |
| Weighted average contribution margin | ((Contribution margin per unit * units sold 'X')+(Contribution margin per unit * units sold 'Y'))/Total units of 'X' & 'Y' sold |
Weighted average contribution margin = (($40*5,000)+($20*35,000))/(5,000+35,000)
Weighted average contribution margin = (($200,000)+($700,000))/40,000
= ($900,000)/40,000
= $22.5
Break even point in units= $675,000/$22.5
= 30,000 units
Option: C
| Break even point in units | 30,000 |
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