Edgewater Enterprises manufactures two products. Information follows: Product A Product B Sales price $ 13.70 $...
Edgewater Enterprises manufactures two products. Information
follows:
| Product A | Product B | |||||
| Sales price | $ | 13.70 | $ | 17.50 | ||
| Variable cost per unit | $ | 6.70 | $ | 7.20 | ||
| Product mix | 40% | 60% | ||||
Calculate the break-even point if Edgewater’s total fixed costs are
$235,000. (Round your intermediate calculations to 2
decimal places and final answer to the nearest whole
number.)
Homework Answers
| A | B | |
| Contribution margin=(Sales price-Variable cost) | (13.7-6.7)=$7 | (17.5-7.2)=$10.3 |
Weighted average Contribution margin=Respective Contribution margin*Respective Sales Mix
=(7*0.4)+(10.3*0.6)=$8.98
Hence breakeven point=Fixed cost/Weighted average Contribution margin
=(235000/8.98)
=26,169 units(Approx).
Add Answer to:
Edgewater Enterprises manufactures two products. Information
follows:
Product A
Product B
Sales price
$
13.70
$...
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