Brief Exercise 19-8 NoFly Corporation sells three different models of a mosquito

Question

Brief Exercise 19-8 NoFly Corporation sells three different models of a mosquito "zapper." Model A12 sells for $60 and has variable costs of $38. Model B22 sells for $104 and has variable costs of $72. Model C124 sells for $401 and has variable costs of $303. The sales mix of the three models is A12, 58%; B22, 25%; and C124, 1796. If the company has fixed costs of $254,456, how many units of each model must the company sell in order to break even? (Round Per unit values to 2 decimal palces, e.g. 15.25 and final answers to O decimal places, e.g. 5,275.) Model A12 B22 C124 Total break-even units

Explanation / Answer

Model Contribution margin A12 22 =60-38 B22 32 =104-72 C124 98 =401-303 Weighted average contribution margin=(22*58%)+(32*25%)+(98*17%)= $37.42 Total break-even=254456/37.42= 6800 units Model Break-even A12 3944 =6800*58% B22 1700 =6800*25% C124 1156 =6800*17% Total break-even=254456/37.42= 6800 units

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