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keAssignment/takeAssi gnmentMain.do?invoker-assignments&takeAssignmentSessionLocator-assignment-take;&inprogress-false; eBook Show Me How Calculator Sales Mix and Break-Even Analysis Megan Company has fixed costs of $1,106,160. The unit selling price, variable cost per unit, and contribution margin per unit for the follow Product Selling Price Variable Cost per Unit Contribution Margin per Unit Q0 $460 $180 120 $280 Zz 320 200 The sales mix for Products QQ and ZZ is 20% and 80%, respectively. Determine the break-even point in units ofQQ and ZZ If required round your answers to the nearest whole number a. Product QQ units b. Product ZZ units

Explanation / Answer

1. Fixed costs allocated to QQ = $1,106,160 X 20% = $221,232
  Fixed costs allocated to ZZ = $1,106,160 X 80% = $884,928

a. Break even units for QQ = Fixed Costs / Contribution margin per unit
= $221,232 / $180 = 1,229 units

b. Break even units for ZZ = Fixed Costs / Contribution margin per unit
= $884,928 / $120 = 7,374 units

2. Operating Leverage = Contribution / Net Income
= $308,100 / $59,200 = 5.20

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