Sales Mix and Break-Even Analysis Megan Company has fixed costs of $2,017,400. T

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Question

Sales Mix and Break-Even Analysis

Megan Company has fixed costs of $2,017,400. The unit selling price, variable cost per unit, and contribution margin per unit for the company's two products are provided below.

The sales mix for products Model 94 and Model 81 is 75% and 25%, respectively. Determine the break-even point in units of Model 94 and Model 81 of the overall (total) product, E. If required, round your answers to the nearest whole number.

a. Product Model 94 units

b. Product Model 81 units

Product Selling Price Variable Cost per Unit Contribution Margin per Unit Model 94 $760 $500 $260 Model 81 600 500 100

Explanation / Answer

Weighted average contribution margin = (260*75%+100*25%) = 220 per unit

Break even point = 2017400/220 = 9170 units

a) Product Model 94 units = 9170*75% = 6878 units

b) Product Model 81 units = 9170*25% = 2292 units

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Sales Mix and Break-Even Analysis Megan Company has fixed costs of $2,017,400. T

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