Hey Chegg, can you please show me how you arrive at the answer. Also, can you al

Question

Hey Chegg, can you please show me how you arrive at the answer. Also, can you also me how you come up with or (figure out) the proportions, in relation to the problem.

Multiple Product Break-Even Analysis
Presented is information for Stafford Company's three products.

With monthly fixed costs of $112,500, the company sells two units of A for each unit of B and three units of B for each unit of C.

Determine the unit sales of product A at the monthly break-even point.
Answer units

A B C Unit selling price $ 6 $ 8 $ 7 Unit variable costs (4) (5) (3) Unit contribution margin $ 2 $ 3 $ 4

Explanation / Answer

The unit sales of product A at monthly break even point is 27,000 units

Break even sales = Total Fixed expenses / (Weighted average selling price-Weighted Avergae variable cost)

Total Fixed expenses = 112,500

Weighted Average selling price = (Sale price A*sale % A)+(sale price B*sale % B)+(sale price C*sale % C)

Weighted Average selling price = (6*60%)+(8*30%)+(7*10%) = 6.7

Weighted Average Variable cost = (Variable Cost A*sale % A)+(Variable Cost B*sale % B)+(Variable Cost C*sale % C)

Weighted Average Variable cost = (4*60%)+(5*30%)+(3*10%) = 4.2

Break even sales = 112500 / (6.7-4.2) = 45,000 units

Expected Sales Units % Selling Price Varianble cost C 1 10% 7 3 B 3 30% 8 5 A 6 60% 6 4 10 100%

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