Purchase Solution

Break even point with sales mix

Not what you're looking for?

Ask Custom Question

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.

Purchase this Solution
Solution Summary

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

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 ...

Purchase this Solution
Free BrainMass Quizzes
Writing Business Plans

This quiz will test your understanding of how to write good business plans, the usual components of a good plan, purposes, terms, and writing style tips.

Six Sigma for Process Improvement

A high level understanding of Six Sigma and what it is all about. This just gives you a glimpse of Six Sigma which entails more in-depth knowledge of processes and techniques.

Change and Resistance within Organizations

This quiz intended to help students understand change and resistance in organizations

Business Processes

This quiz is intended to help business students better understand business processes, including those related to manufacturing and marketing. The questions focus on terms used to describe business processes and marketing activities.

Organizational Leadership Quiz

This quiz prepares a person to do well when it comes to studying organizational leadership in their studies.

View More Free Quizzes
Related BrainMass Solutions

  • Operating & Financial Leverage

    How can sales-mix changes impact a company's break-even point? The break-even point is the level of sales at which profit is zero.

  • Break-even

    point estimated fixed costs for the current year= $279,000 sales mix contribution margin= $4.50 Therefore no of units required to reach break even point= 62,000 =279000/4.5 c Based on the break-even sales

  • Cost-Volume-Profit Relationship

    375156 Cost-Volume-Profit Relationship Explain how a shift in the sales mix among 3 products (even if the total sales remain the same,as planned, say $500,000 ) could result in both a higher break-even point and a lower net operating income.

  • Contribution margin ratio; break-even point in dollar sales

    Contribution per unit on sales mix = 75% of $10 + 25% of $40 = 7.5 + 10 = $17.5 Breakeven Point of sales mix = Fixed Cost/Contribution per unit of sales mix = 175000/17.5 = 10,000 Product A sell units at break-even point = 75% of 10,000 = 7,500

  • sales level in dollars for each division

    division at the break even point: Break Even point in Dollars* Sales Mix Percentage for division Sales level in dollars for iPad division= 60%*375000 =$225000 Sales level in dollars for iPod division= 40%*375000 =$150000 The sales level in dollar

  • Breakeven point in dollar sales and composite units

    Break-Even Points Sales Units Sales Dollars Red at break-even $ White at break-even $ Blue at break-even $ Requirement 2: If the company uses the new material, determine its new break-even point in both sales units and sales dollars of each individual

  • Weighted-Average Contribution Margin and Break-even

    Break-even point in units = Fixed costs/Contribution margin per unit Break-even point in units = $45,000/$9.00 Break-even point in units = 5,000 3) Assuming that the sales mix remains constant, the number of units of Plain that Jamal must sell to

  • Alsatia's contribution margin, Tanner's break even point, Deavila's sales mix shifts

    b) If the sales mix shifts toward Product Q911 with no changes in total sales, what will happen to the break-even point for the company? Explain. See the answers attached.

  • Variable cost / absorption cost/ break even

    TRUE 5 A shift in the sales mix from products with high contribution margin ratios toward products with low contribution margin ratios will raise the break-even point. TRUE 6.

View More Related Solutions