Homework Answers
Contribution Margin per unit = Unit selling price - Unit variable cost
For product A = 85 - 40 = 45
For product B = 118 - 48 = 70
Sales mix is given as 5:2
Weighted average contribution margin per unit
= Product A (45*5/7) + Product B (70*2/7)
= 52.14
Overall break even units = Fixed cost/Weighted average contribution margin per unit
= 518,300/52.14
= 9940 units
Product A units at break even = 9940 * 5/7
= 7,100 units
Option B
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