Assuming a constant mix of 3 units of Alpha for every 1 unit of Beta, a selling price of $21.60 for Alpha and $28.80 for Beta, variable costs per unit of $14.40 for Alpha and $16.80 for Beta, and total fixed costs of $53,760, the break- even point in units would be:
A) 4,800 units of Alpha and 1,600 units of Beta
B) 40,320 units of Alpha and 13,440 units of Beta
C) 1,600 units of Alpha and 4,800 units of Beta
D) 1,200 units of Alpha and 400 units of Beta

Question

Quizplus · Accepted Answer

The contribution margin per unit for Alpha is $7.20 ($21.60 - $14.40) and for Beta is $12.00 ($28.80 - $16.80). The weighted average contribution margin is calculated based on the mix (3 Alpha: 1 Beta), which is $8.40. The break-even point in units is calculated by dividing the total fixed costs by the weighted average contribution margin, resulting in 6,400 units of the mix, which translates to 4,800 units of Alpha and 1,600 units of Beta.

Assuming a Constant Mix of 3 Units of Alpha for Every