Calculate the company break-even point in composite units

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Question - Gatewood Hills Inc has three products X, Y, and Z, and its fixed costs are $69,000. The sales mix for its products are 3 units of X, 4 units of Y, and 1 unit of Z. Information about the three products follows:

 

X

Y

Z

Projected sales in dollars

$192,000

$192,000

$64,000

Selling price per unit

$40

$30

$40

Variable cost per unit

$30

$20

$25

(a) Calculate the company's break-even point in composite units AND sales dollars. Hint: The contribution margin of a composite unit is a number between $80 and $100).

(b) Calculate the number of units of each individual product to be sold at the break-even point. (Check: At break-even point you should have 2,436 units of product X.

Reference no: EM132170112

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