How do I find the brrak-even without fixed costs? Exercise 20-6 Yard Tools manuf
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Question
How do I find the brrak-even without fixed costs?
Exercise 20-6 Yard Tools manufactures lawnmowers, weed-trimmers, and chainsaws. Its sales mix and unit contribution margin are as follows Unit Contribution Margin Sales Mix $31 522 $39 Chainsaws Yard Tools has fooad costs of $4,190.500. Compute the number of units of each product that Yard Tools must sel in order to break even under this product mix. (use Weighted-Average Contribution Margin Ratio rounded 30% to 2 decímaí places e.g. 0.25 and round final answers to o decimaí places, e.a. 2,510) Woed-trimmer units Chainsaws units LINK TO TEextExplanation / Answer
Sales mix %
CM Per Unit
Weighted Average CM
Lawnmowers
20%
$31
$6.20
Weed-trimmers
50%
$22
$11.00
Chainsaws
30%
$39
$11.70
Total
$28.90
Total breakeven sales in unit = Fixed cost/CM = $ 4,190,500/$28.90 = 145,000
Sales Mix %
Total Break-even Sales in Units
Sales Units Needed Per Product
Lawnmowers
20%
145,000
29,000 units
Weed-trimmers
50%
145,000
72,500 units
Chainsaws
30%
145,000
43,500 units
Total units
145,000 units
**** Fixed cost is mentioned, without which break-even sales can not be computed.
Sales mix %
CM Per Unit
Weighted Average CM
Lawnmowers
20%
$31
$6.20
Weed-trimmers
50%
$22
$11.00
Chainsaws
30%
$39
$11.70
Total
$28.90
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