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    Break even point with sales mix

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    1 Problem:
    A firm sells two products, one call slingers and the other called widgets.  
    The firm has a fixed cost of $50,000.00 per year.  Each slinger costs $4 to produce but can be sold in the market for $9
    What is the breakeven production of the firm in terms of Widgets and Slingers sold?
    Each widget costs $11 to product, and has a market price of $20.  5 Slingers are sold for every 7 Widgets.  
    The production facility of the firm can produce any number of widgets and slingers required.

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    Solution Preview

    Solution is presented in Excel file attached herewith in the following parts.
    1 Budgeted Contribution margin per unit.
    2 Assuming that the sales mix remains as budgeted, determine how many units of each product ,company must sell in order to break even in 20X4.
    (a)Calculation of weighted average selling price & weighted average variable cost
    (b) Calculation of Break even units
    © Verification of Break even units calculated above

    Problem:
    A firm sells two products, one call slingers and the other called widgets.  
    The firm has a fixed cost of $50,000.00 per ...

    Solution Summary

    This solution helps with questions about break even point with sales mix.

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