Assuming a constant mix of 3 units of X for every 1 unit of Y, a selling price of $18 for X and $24 for Y, variable costs per unit of $12 for X and $14 for Y, and total fixed costs of $89,600, the break-even point in units would be
A) 9,600 units of X and 3,200 units of Y.
B) 2,400 units of X and 800 units of Y.
C) 3,200 units of X and 9,600 units of Y.
D) 1,867 units of X and 622 units of Y.

Question

Quizplus · Accepted Answer

The contribution margin per unit of X is $6 ($18 - $12) and for Y is $10 ($24 - $14). The weighted average contribution margin is calculated based on the sales mix (3X:1Y), which is $7. The break-even point in units is total fixed costs divided by the weighted average contribution margin, which results in 12,800 units total (9,600 units of X and 3,200 units of Y).

Assuming a Constant Mix of 3 Units of X for Every