Business Solutions sells upscale modular desk units and office chairs in the ratio of 3:2 (desk unit:chair). The selling prices are $1,250 per desk unit and $500 per chair. The variable costs are $750 per desk unit and $250 per chair. Fixed costs are $120,000. Required 1. Compute the selling price per composite unit. 2. Compute the variable costs per composite unit. 3. Compute the break-even point in composite units. 4. Compute the number of units of each product that would be sold at the break-even point.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Business Solutions sells upscale modular desk units and office chairs in the ratio of 3:2 (desk
unit:chair). The selling prices are $1,250 per desk unit and $500 per chair. The variable costs are $750 per
desk unit and $250 per chair. Fixed costs are $120,000.
Required
1. Compute the selling price per composite unit.
2. Compute the variable costs per composite unit.
3. Compute the break-even point in composite units.
4. Compute the number of units of each product that would be sold at the break-even point.

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