Question

Handy Home sells windows and doors in the ratio of 8:2 (windows:doors). The selling price of each window is $200 and of each door is $500. The variable cost of a window is $125 and of a door is $350. Fixed costs are $900,000 (1) Determine the selling price per composite unit. Total per composite unit Selling Price per unit Quantity 8 S S 1,600.00 200.00 Windows 1,000.00 500.00 2 Doors S 2,600.00 (2) Determine the variable costs per composite unit. Total per composite unit Variable costs per unit Quantity S 1,000.00 125.00 8 Windows 700.00 350.00 Doors 2 S 1,700.00 Contribution margin per composite unit Contribution margin 2,600.00 S 1,700.00 Less: Contribution margin (3) Determine the break-even point in composite units Choose Numerator: Choose Denominator: Break even units. Break even units (4) Determine the number of units of each product that will be sold at the break-even point. Quantity Number of composite units to break even. Unit sales at break-even point Windows 1.000 8,000 Windows Doors 1,000 2.000 Doors 10,000 Total Total

Answer 1

1)
Determine the Selling Price per composite unit	Quantity	Selling Price per unit	Total Composite unit
Windows	8	200	1600
Doors	2	500	1000
			2600
2)
Determine the variable costs per composite unit	Quantity	Variable Cost per unit	Total per composite unit
Windows	8	125	1000
Doors	2	350	700
			1700
Contribution margin per composite unit
Sale Price per unit	2600
Less:
Variable Cost per unit	-1700
Contribution Margin per unit	900

3) Determine the breakeven point in composite units
Numerator	Denominator	Breakeven units
Fixed cost	Conribution per unit
900000	900	1000
4)
Determine the number of units of each product that will be sold at the breakeven point
	Quantity	Number of composite	Units sales at breakeven point
		units to breakeven
Windows	8	1000	8000
Door	2	1000	2000
Total		Total	10000