Break Even
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1 Crabtree Inc. produces two types of products -Ã? Gizmos and Gadgets. The following information is available related to each product:
Gizmos Gadgets
Sales price per unit $80 $50
Variable costs per unit 36 22
Three-fourths of the products sold are Gizmos and one-fourth are Gadgets. If total fixed costs are $50,000, how many total units need to be sold in order for the company to break even?
2. Collegiate Products produces and sells padded stadium seats emblazoned with a university logo. The company has the capacity to produce as many as 6,000 seats per month but consistently averages much less. When 4,500 seats are produced, each seat has $5 of variable costs and $2 of fixed overhead costs allocated to it. The seats typically sell for $25 each. The company has been approached by a small college who wishes to purchase 500 seats for special alumni at a price of $5 per seat. If the special order were accepted, net income would:
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The solution does a great job of answering the question. The solution is brief and concise and very easy to follow along. All the steps are clearly shown and formulas are provided so that the student can answer similar questions in the future. It can be easily understood by anyone with a basic understanding of the topic. Overall, an excellent solution.
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Answer 1:
Let the total units be X
80*(3/4)*x + 50*(1/4)*x = 50,000 + 36*(3/4)*x + 22*(1/4)*x
=>(240 + 50 - 108 - ...
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