A firm sells two different products,A and B.For each unit of B sold,the firm sells two units of A.Total fixed costs $1,260,000.Additional selling prices and cost information for both products follow:
Required:
(a)Calculate the contribution margin per composite unit.
(b)Calculate the break-even point in units of each individual product.
(c)If pretax income before taxes of $294,000 is desired,how many units of A and B must be sold?

Question

A firm sells two different products,A and B.For each unit of B sold,the firm sells two units of A.Total fixed costs $1,260,000.Additional selling prices and cost information for both products follow:
  Required:
(a)Calculate the contribution margin per composite unit.
(b)Calculate the break-even point in units of each individual product.
(c)If pretax income before taxes of $294,000 is desired,how many units of A and B must be sold?

Quizplus · Accepted Answer

The Answer of A firm sells two different products,A and B.For each unit of B sold,the firm sells two units of A.Total fixed costs $1,260,000.Additional selling prices and cost information for both products follow:
  Required:
(a)Calculate the contribution margin per composite unit.
(b)Calculate the break-even point in units of each individual product.
(c)If pretax income before taxes of $294,000 is desired,how many units of A and B must be sold?

A Firm Sells Two Different Products,A and B