BREAK EVEN point is the sales at which there is no profit no loss.
At break even total sales= fixed cost+variable cost
sales ratio for product 1 & 2 are
140:60
=7:3
Product | Contribution margin | ratio | Contribution margi |
1 | $60 | 0.70X | $42X |
2 | $40 | 0.30X | $12X |
At break even:
Total fixed cost = Contribution margin
$2700=$42X+$12X
X=50 units
product 1:
0.70X
0.70*50units
=35 units
Thus, at break even product 1 sold would be 35 units.
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product 1 product 2 Total Expected Unit Sales 140 60 200 Price per unit Variable cost...
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