Sales Mix and Break-Even Analysis Heyden Company has fixed costs of $1,932,920.

Question

Sales Mix and Break-Even Analysis

Heyden Company has fixed costs of $1,932,920. The unit selling price, variable cost per unit, and contribution margin per unit for the company's two products follow:

The sales mix for Products QQ and ZZ is 90% and 10%, respectively. Determine the break-even point in units of QQ and ZZ. If required, round your answers to the nearest whole number.

a. Product QQ  units

b. Product ZZ  units

Explanation / Answer

Calculation of break even point in units: Break even point in units= Fixed cost/ contribution per unit Contribution per unit=270*0.90+100*0.10= $253 Break even point= 1932920/253= 7640 units a) Product QQ= 7640*0.90= 6876 units b) Product ZZ= 7640*0.10=764 units

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