Question

Question 2: Hindi Builders Inc. produces three products: A, B, and C. The following information is presented for the three products: Fixed Cost 687,400 Product B 120 Units produced Price Per Unit Variable Cost Per Unit Product A 80 $ 320 S 160 $ $ Product C 200 $ 2,800 S 1,500 1,800 800 Required: 1. Calculate the contribution margin for each product 2. Calculate the break-even point in units of the three products A, B, and C combination based on the sales mix percentage 3. Please give suggestions to the decision makers about how to increase profit based on the CVP analysis. glish (US)

Answer 1

Answer to Queston-1 Produto produta C ( Product A 2800 Per 320 18oo selling price ferunt 800 500 160 less: variable cost per unit 1300 1000 160 contribuhon morrg in contribution margin per unit = $ 160 Product A 1000 Product 3 - 6 $ 1300 ( Product C Contribution margin in total Centa Total contribution margin = contribution marsin per cut & Noot caut sold 160 x 80 Product A 12800 $1 120 000 Product B B 1000 X 120 260000 producte 1300 x 200

Answer do Queshon-2 Fixed cost Break-even point in unit- contribution margin per unit axloo Total unit sold in the mix sales mix [unt sold by each product 80 Xloo 20% Product A = 400 30%. 120 Xcoo 400 product B 50 % 200 -xcoo 400 Product c Contribution margin per unit of sales mix contribution margin sales mix Product per unit weighted average contribution margi in 160 20%. 32 Product - A 1000 x 3o4. 300 Product - B В 650 1300 Soy. Product - c & 982 Contribution monsin per aut 07 mil. Fixed cost & 687400

687400 Break-e -even point in unit 982 700 unts 700x20%. Break-even unt sales of Product A = 140 units 700 x 30% Break-even unit sales of Product B= 210 units - 700X Sol. Breats- even unit sales of product. c. 350 units Answer to Queshon-3 he makes product B Here, under cup analysis we can Ranie the Product based on Contribution marginper unit. Product c Contribution margin of $1300 per cuit to makes contribution margin of $ 1000 per nuit and product A monthly makes contribution margin of & 160. Increase in sales unit of product c. earns mome prohit than Increase in sales unit of Product A and product B ③ Decrease in Finced cost will result in increase in Profit profit. But Reduction in Faced cost shall not affect the customer loyatily Loyality.