Yard Tools manufactures lawnmowers, weed-trimmers, and chainsaws. Its sales mix

Question

Yard Tools manufactures lawnmowers, weed-trimmers, and chainsaws. Its sales mix and unit contribution margin are as follows.

Exercise 20-6 Yard Tools manufactures lawnmowers, weed-trimmers, and chainsaws. Its sales mix and unit contribution margin are as follows. Unit Contribution Margin Lawnmowers Weed-trimmers Chainsaws Sales Mix 20 % 50% 30 % $31 $25 $37 Yard Tools has fixed costs of $4,499,800 Compute the number of units of each product that Yard Tools must sell in order to break even under this product mix. (Use Weighted-Average Contribution Margin Ratio rounded to 2 decimal places e.g.0.25 and round final answers to 0 decimal places, e.g. 2,510.) Lawnmowers Weed-trimmers Chainsaws units units units

Explanation / Answer

Weighted average contribution margin=Respective sales mix*Respective contribution margin

=(0.2*31)+(0.5*25)+(0.3*37)=$29.80

Hence overall breakeven=Fixed cost/contribution margin

=(4499800/29.8)=151000 units

Lawnmovers(151000*0.2) 30200 units Weed-trimmers(151000*0.5) 75500 units Chainsaws(151000*0.3) 45300 units.

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