Multiple product break-even analysis LO 3-6 Tanaka Company manufactures two prod

Question

Multiple product break-even analysis LO 3-6 Tanaka Company manufactures two products. The budgeted per-unit contribution margin for each product follows: Tanaka expects to incur annual fixed costs of $309,000. The relative sales mix of the products is 70 percent for Super and 30 percent for Supreme. Determine the total number of products (units of Super and Supreme combined) Tanaka must sell to break even. (Do not round intermediate calculations.) How many units each of Super and Supreme must Tanaka sell to break even? (Do not round intermediate calculations.)

Explanation / Answer

Tanaka Company- Multiple product break even analysis a Total Number of products (units of super and supreme combined) Tanaka must sell to break even Break even point in units of sales mix = Total Fixed cost / weighted average contribution margin per unit Total Fixed cost $          3,09,000.00 Weighted average contribution Margin per unit (W.N) $                      61.80 Break even point in units of sales mix 5,000 units b How many units each of super and supreme must Tanaka sell to break even Product super supreme Sales mix ratio 70% 30% x Total Break even units 5000 5000 product units at Break even point 3500 1500 Working Note: Products super supreme Contribution margin per unit $                      54.00 $                                    80.00 Sales mix percentage 70% 30% weigheted contribution margin per unit $                      37.80 $                                    24.00 Weighted average contribution Margin per unit $                                                                           61.80

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