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Question - Manatoah Manufacturing produces 3 models of window air conditioners: model 101, model 201, and model 301. The sales price and 1lI'arialJle costs for these three models are as follows:
Product
Sales Price per Unit
Variable Cost per Unit
Model 101
$275
$185
Model 201
350
215
Model 301
400
245
The current product mix for model 101:201:301 is 4:3:2. The three models share total ?xed costs of $430,000.
Requirements -
1. Calculate the sales price per composite unit.
2. What is the contribution margin per composite unit?
3. Calculate Manatoah's break-even point in both dollars and units. Calculate the break-even point for the composite unit used for the break-even analysis calculation only, as well as the "actual real" number of units of Model 101, Model 201, and Model 301.
4. Using an income statement format, prove that this is the break-even point.
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