Question

please help me answer this by 8pm today. thank you!!

Cullumber Company sells two types of air filters, Standard and Deluxe. The Standard filter has a contribution margin of $32 while the Deluxe has a contribution margin of $43. Cullumber sells 5 Standard filters to every 1 Deluxe filter. If fixed costs total $190008, how many Standard and Deluxe filters must be sold to breakeven? O 5938 Standard: 4419 Deluxe O 4752 Standard: 1188 Deluxe O 4680 Standard: 936 Deluxe O 1197 Standard: 4419 Deluxe

Answer 1

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In the given problem, we have to calculate the BEP and the company is selling 2 products. Since, Cullumber company is selling 5 units of Standard filters for every 1 unit of deluxe filter sold. Therefore, to solve this problem, first we will calculate contribution margin for Bundle of 6 units sold consisting of 5 Standard filters and 1 Deluxe filter. Contribution Margin per bundle of 6 units II (CM of Standard Filter *5)+(CM of Deluxe filter*1) (32*5)+(43*1) $ 203.00 Per Bundle Breakeven in bundles = Fixed Cost / CM per Bundle 190008/203 936 Bundle Standard Units required to be sold to breakeven Bundles required for Breakeven *5 936*5 4680 Units Deluxe Units required to be sold to breakeven Bundles required for Breakeven *1 936*1 936 Units Accordingly, correct answer is option (c).i.e. 4680 units of Standard filter and 936 units of Deluxe Filters.