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A company makes two products, product X with a contribution per unit of $10 and product Y with a contribution per unit of $4.
These products are sold in the mix 3:2 by volume and fixed costs are $38,000 per period.
The breakeven point for product Y, based on the expected sales mix is:
Suggested Answer: A, D, E
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35 comments · newest first
LO
Loreta
11 months ago
Fixed costs are $38,000, so it checks out.
KA
Karon
11 months ago
Totally agree, that makes sense!
FA
Fausto
11 months ago
Wait, are you sure about that? Seems off.
RO
Romana
12 months ago
Yep, it's 2000 units!
FR
Frederica
12 months ago
Breakeven for Y is based on the sales mix, right?
DO
Donette
1 year ago
I'm a bit lost on how to apply the sales mix here. Do we need to adjust the contribution per unit for product Y somehow?
SK
Skye
1 year ago
If I recall correctly, we should find the total contribution from both products based on the sales mix before calculating the breakeven for product Y.
WY
Wynell
1 year ago
I remember a similar question where we had to find the breakeven point using a sales mix. I think we divide fixed costs by the contribution margin.
CO
Cordelia
1 year ago
I think we need to calculate the weighted average contribution first, but I'm not entirely sure how to set that up.
JA
Janessa
1 year ago
Wait, do I need to consider the sales mix when calculating the breakeven point for product Y? I'm not sure how that factors in.
GA
Gabriele
1 year ago
This seems straightforward enough. I'll just plug the numbers into the breakeven formula and see what I get.
GI
Giovanna
1 year ago
I think I've got this. The key is to find the total contribution margin across both products, then use that to calculate the breakeven point for product Y specifically.
AL
Alex
1 year ago
Hmm, I'm a bit confused about the sales mix. Do I need to factor that in somehow when calculating the breakeven point for product Y?
DE
Devon
1 year ago
Okay, this looks like a classic breakeven analysis problem. I'll need to find the total contribution margin and then divide the fixed costs by the contribution per unit for product Y.
IL
Ilda
1 year ago
I'm a little confused here. Should we contact the regulator first to make sure we're handling this properly? Option B might be the best way to start.
DA
Darrin
1 year ago
I could be wrong, but wasn't the "top down" distribution mentioned in one of our practice quizzes? It seems familiar.
KA
Karrie
2 years ago
2000 units, eh? I hope the company has a big warehouse to store all those products. Maybe they should consider selling in bulk - that would really shake things up!
VI
Vincent
1 year ago
You're right, selling in bulk could potentially change the sales mix ratio. It's something to consider for sure.
CO
Colene
1 year ago
But wouldn't selling in bulk affect the sales mix ratio of 3:2?
JU
Justine
1 year ago
I agree, bulk sales could be a game changer for the company.
MI
Miles
1 year ago
That's a good point! Selling in bulk could definitely help with storage space.
GE
Gerald
2 years ago
2000 units? That's nothing! I bet I could break even on a lemonade stand with that kind of volume.
CH
Cherrie
2 years ago
2000 units, huh? I wonder if the exam will throw in a curveball and ask for the breakeven point in dollars instead. Either way, I'm feeling confident about this one.
AL
Alita
1 year ago
I think it's asking for units, not dollars.
AH
Ahmad
1 year ago
A) 2000 units per period
TA
Tayna
2 years ago
I'm not sure, I think we need to consider the fixed costs as well to calculate the breakeven point accurately.
CA
Cathrine
2 years ago
I agree with Bulah, because product Y has a lower contribution per unit compared to product X.
FL
Floyd
2 years ago
2000 units? Piece of cake! Although, I hope the exam doesn't ask me to calculate the breakeven point for product X - that would be a real headache.
XU
Xuan
1 year ago
Thanks for the info! I feel more confident now for the exam. Let's ace this together!
MA
Malissa
1 year ago
The breakeven point for product X would be 3800 units per period. So, you just need to sell more than that to start making a profit.
TI
Timmy
1 year ago
That would be great! I'm not very good with numbers, so any help is appreciated.
YU
Yuki
2 years ago
Don't worry, I can help you with the calculation for product X. It's not as hard as it seems.
FE
Felice
2 years ago
Ah, I see. The fixed costs and the relative contribution per unit of each product are the key factors here. Makes sense to me!
EV
Evangelina
2 years ago
This seems straightforward. The breakeven point for product Y should be 2000 units, given the contribution per unit and the sales mix.
BU
Bulah
2 years ago
I think the breakeven point for product Y is 2000 units per period.