Warner Company has $228,000 of total fixed costs and sells products A and B with
ID: 2335180 • Letter: W
Question
Warner Company has $228,000 of total fixed costs and sells products A and B with a product mix of 40% A and 60% B. Selling prices and variable costs for A and B result in contribution margins per unit of $10 and $6, respectively. Compute the break-even point.QUESTION 3 Partially correct Mark 3.75 out of 5.00 P Flag question Break-Even with Multiple Products Warner Company has $228,000 of total fixed costs and sells products A and B with a product mix of 40% A and 60% B. Selling prices and variable costs for A and B result in contribution margins per unit of $10 and $6, respectively. Compute the break-even point. Enter product mix answers in decimal form. Round weighted average unit contribution margin to two decimal places, if applicable. Product Product Mix Contribution Margin per unit Weighted average unit contribution margin 40 X 10 60 x 3.6 7,6 Break-even point 30,000 units Check
Explanation / Answer
Break-even point = Fixed costs / Weighted average unit contribution margin = $228,000 / $7.6 = 30,000 units
Product Product Mix Contribution Margin per unit Weighted average unit contribution margin A 0.40 $10 $4 B 0.60 $6 $3.6 $7.6