Gabe Industries sells two products, Basic models and Deluxe models. Basic models
ID: 2599259 • Letter: G
Question
Gabe Industries sells two products, Basic models and Deluxe models. Basic models sell for $42 per unit with variable costs of $25 per unit. Deluxe models sell for $54 per unit with variable costs of $15 per unit. Total fixed costs for the company are $1,530. Gabe Industries typically sells three Basic models for every Deluxe model. What is the breakeven point for Basic models and Deluxe models? (Round any intermediary calculations to the nearest cent and your final answers to the nearest whole unit.) A. 26 units of Basic, 38 units of Deluxe 0 B. 17 units of Basic, 51 units of Deluxe ° C. 38 units of Basic, 26 units of Deluxe 0 D. 51 units of Basic, 17 units of DeluxeExplanation / Answer
Answer: [D] Basics – 51 units AND Delux – 17 units
Working Note:
Basic Model
(42-25)*51 = 867
867
Delux Model
(54-15)*17 = 663
663
Total Contribution
1,530
Less: Fixed Cost
(1,530)
Profit
Nil
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Basic Model
(42-25)*51 = 867
867
Delux Model
(54-15)*17 = 663
663
Total Contribution
1,530
Less: Fixed Cost
(1,530)
Profit
Nil
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