4. Patricia Company produces two products, X and Y, which account for 60 percent

Question

4. Patricia Company produces two products, X and Y, which account for 60 percent and 40 percent, respectively, of total sales dollars. Contribution margin ratios are 50 percent for X and 25 percent for Y. Total fixed costs are $120,000. What is Patricia's break-even point in sales dollars?

A) $300,000

B) $375,000

C) $342,856

D) $328,767

Paney Company makes calendars. Information on cost per unit is as follows:

Direct materials

$1.50

Direct labor

1.20

Variable overhead

0.90

Variable marketing expense

0.40

Fixed marketing expense totaled $13,000 and fixed administrative expense totaled $35,000. The price per calendar is $10.What is the variable cost per unit?

Direct materials

$1.50

Direct labor

1.20

Variable overhead

0.90

Variable marketing expense

0.40

Explanation / Answer

(4) Contribution per mix = 0.5 x 0.6 + 0.25 x 0.4 = 0.4 Breakeven point in dollar = 120000/0.4 = $300000 (A) (6) Breakeven point in hours = 78000/(35-21) = 5571 hours (E) (7) Variable expenses = 7.5 x 0.6 = $4.50 Contribution margin ratio = (6 - 4.5)/6 = 25% (B) (8) Variable cost per unit = 1.5 + 1.2 + 0.9 + 0. 4 = $4.00 (C) Hope this helps!

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