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The data below pertain to two types of products manufactured by Cobb Corp. Fixed costs total...

The data below pertain to two types of products manufactured by Cobb Corp. Fixed costs total $300,000 annually. The expected mix in units is 60% for product Y and 40% for product Z.

Per Unit

Sales Price

Variable Costs

Product Y

$120

$ 70

Product Z

500

200

How much is Cobb’s breakeven point in units?

A) 2,000

B)2,459

C) 857

D) 1,111

0 0
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Answer #1
Y Z
Contribution margin(Sales price-Variable cost) (120-70)=$50 (500-200)=$300

Total Contribution margin=Respective Contribution margin*Respective sales mix

=(50*0.6)+(300*0.4)=$150

Hence breakeven point=Fixed cost/Total Contribution margin

=(300,000/150)

=2000

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