Browning Company sells two products—X and Y
Product X is sold for $30 per unit and has a variable cost per unit of $15. Product Y is sold for $30 per unit and has a variable cost of $10 per unit. Total fixed costs for the company are $20,000. Browning Company typically sells three units of Product X for every unit of Product Y. What is the breakeven point in total units? (Round any intermediate calculations to two decimal places, and your answer to the nearest unit.)
A) 1,231 units
B) 923 units
C) 308 units
D) 1,333 units
A .A)
Product X Product Y
Sales price per unit $30 $30
Less variable cost per unit (15 ) (10 )
Contribution margin per unit $15 $20
Weighted contribution = ($15 x 3 ) + ($20 x 1 ) = $65
Weighted-average contribution margin per unit = $65 / 4 = $16.25
Breakeven sales in units = (Fixed costs + Target profit) / Contribution margin per unit
Breakeven sales in units = ($20,000 + 0 ) / $16.25 per unit = 1,231 units
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