Boards 4 Bucks sells 3 different Board Games: MakinMoney (MM), UpNDown (UD), Che

Question

Boards 4 Bucks sells 3 different Board Games:   MakinMoney (MM), UpNDown (UD), ChexNBalances (CB)

Last year Boards4Bucks sold 36,000 MM games, 63,000 UD games, and 81,000 CB games.

MM sells for $22 with a variable cost of $8

UD sells for $28 with a variable cost of $6

CB sells for $35 with a variable cost of $11

Fixed Costs for Boards4Bucks are $3,894,562.

The company anticipates that the sales mix proportions will remain the same. For the next year, how many board games of each title must Boards 4 Bucks sell to break even?

Explanation / Answer

Break-even sales =   Fixed cost / contribution per unit

for MM                =$3,894,562 / $14 =   $278,183

for UD                 = $ 3,894,562 / $22 = $177,026

for CB                 = $3,894,562 / $24 = $162,273

contribution per unit = selling price per unit - Variable cost per unit.

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