Answered

Yard Tools manufactures lawnmowers, weed-trimmers, and chainsaws. Its sales mix and unit contribution margin are as follows.
Sales Mix Unit Contribution Margin
Lawnmowers 20 % $32
Weed-trimmers 50 % $24
Chainsaws 30 % $45
Yard Tools has fixed costs of $4,944,500.
Compute the number of units of each product that Yard Tools must sell in order to break even under this product mix. (Use the Weighted-Average Unit Contribution Margin Ratio rounded to 2 decimal places e.g. 0.25 and round final answers to 0 decimal places, e.g. 2,510.)

Answer :

facundobuzzetti

Answer:

Instructions are listed below.

Explanation:

Giving the following information:

Sales Mix Unit Contribution Margin

Lawnmowers 20 % $32

Weed-trimmers 50 % $24

Chainsaws 30 % $45

Break-even point (units)= Total fixed costs / (weighted average selling price - weighted average variable expense)

Break-even point (units)= 4,944,500/ ( 0.20*32 + 0.5*24 + 0.30*45)

Break-even point (units)= 155,000 units

Each product:

Lawnmowers= 0.20*155,000= 31,000

Weed-trimmers= 0.50*155,000= 77,500

Chainsaws= 0.30*155,000= 46,500

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