Compute the break-even point in units for each product

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Reference no: EM133021867

Problem - B&C Ltd sells three types of electronic garden tools - Weeders, Hedge Clippers, and Leaf blowers. Selected information on the rackets is given below:

 

Weeders

Hedge clippers

Leaf blowers

Sales in units (per annum)

50,000

30,000

20,000

Unit selling price

$120

$250

$380

Variable manufacturing cost per unit

$50

$120

$220

Variable selling cost per unit

$20

$50

$60

All sales are made through the company's own retail outlets. The company has the following fixed costs:

Per annum

 

Fixed manufacturing cost

$600,000

Fixed selling and administrative costs

$76,200

Total

$676,200

Required -

(a) Calculate the unit contribution margin for each product type.

(b) Calculate the weighted average unit contribution margin, assuming a constant sales mix.

(c) Compute the break-even point in units for the company as a whole.

(d) Compute the break-even point in units for each product.

(e) Determine the total number of units that must be sold to obtain a target profit of $82,800 for the company.

Reference no: EM133021867

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