A firm sells two products, Regular and Ultra. For every unit of Regular the firm sells, two units of Ultra are sold. The firm's total fixed costs are $1,612,000. Selling prices and cost information for both products follow. What is the firm's break-even point in units of Regular and Ultra?
A) 31,000 Regular units and 31,000 Ultra units.
B) 31,000 Regular units and 62,000 Ultra units.
C) 10,333 Regular units and 20,667 Ultra units.
D) 36,167 Regular units and 72,333 Ultra units.
E) 62,000 Regular units and 31,000 Ultra units.
B) 31,000 Regular units and 62,000 Ultra units.
Break-even point in composite units = $1,612,000/$52 = 31,000 composite units
31,000 composite units = 31,000 Regular units and 62,000 (2 × 31,000) Ultra units.
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