Michael Company has Costs that tend to remain the same in amount, regardless of
ID: 3194775 • Letter: M
Question
Michael Company has Costs that tend to remain the same in amount, regardless of variations in the level of activity.fixed costs of $2,103,750. The unit selling price, Costs that vary in total dollar amount as the level of activity changes.variable cost per unit, and Sales less variable costs and variable selling and administrative expenses.contribution margin per unit for the company's two products are provided below.
The sales mix for products Model 94 and Model 81 is 50% and 50%, respectively. Determine the The level of business operations at which revenues and expired costs are equal.break-even point in units of Model 94 and Model 81. If required, round your answers to the nearest whole number.
Product Selling Price Variable Cost per Unit Contribution Margin per Unit Model 94 $510 $200 $310 Model 81 720 580 140Explanation / Answer
contribution margin = 0.5* (310 +140) = 225
overall breakeven point=Fixed costs/contribution margin
2103750 /225 = 9350
hence
both Model 94 and Model 81 = 9350/2 = 4675