Homework Answers
Required A: Mathematical equation method.
At BEP, there is Zero profit or loss
Let Break even point in units be X
Total sales = Variable cost + Fixed cost + Profit
$310X = $180X + $273,000 + 0
130X = $273,000
X = $273,000 / 130
X = 2,100 units.
Required B: Contribution margin method.
Contribution margin per unit = Selling price per unit - Variable cost per unit
= $310 - $180
= $130
- Break even point = Fixed cost / Contribution margin per unit
= $273,000 / $130
= 2,100 units.
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Product Model
Selling Price
Variable Cost per Unit
Contribution Margin per Unit
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Zoro
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135
90
The sales mix for products Yankee and Zoro is 80% and 20%,
respectively. Determine the break-even point in
units of Yankee and Zoro.
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Compute the break-even point in units using (a) the mathematical
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The unit selling price, variable cost per unit, and
contribution margin per unit
for the company’s two products follow:
Product Model
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Variable Cost per Unit
Contribution Margin per Unit
Yankee
$180
$99
$81
Zoro
225
135
90
The sales mix for products Yankee and Zoro is 80% and 20%,
respectively. Determine the break-even point in
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price, variable cost per unit, and contribution margin per unit for
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