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(c) Product d) A B Total Assume that adding Product B results in no increase to Vortex's fixed costs of $15,000 and that the unit sales prices, unit variable costs, and unit contribution margins are as follows: Product Unit Sales Price $10 15 Unit Sales 10,000 6,000 16,000 Weighted-average contribution margin per unit Unit Variable Cost $7 10 Unit Contribution Margin $3 Vortex's break-even point depends on the sales mix and the unit contribution margins of the individual products. The first step in the break- even computation is determining the weighted-average contribution mar- gin per unit: Source: Principles of Cost Accounting, 15th Edition, Edward J. VanDerbec p. 498 a) BEP in units in total b) BEP in units separately (for each product) BEP in $ in total BEP in $ separately (for each product) (Product A unit contribution x Product A units sold) + (Product B unit contribution x Product B units sold) Product A units sold + Product B units sold

(c) Product d) A B Total Assume that adding Product B results in no increase to Vortex's fixed costs of $15,000 and that the unit sales prices, unit variable costs, and unit contribution margins are as follows: Product Unit Sales Price $10 15 Unit Sales 10,000 6,000 16,000 Weighted-average contribution margin per unit Unit Variable Cost $7 10 Unit Contribution Margin $3 Vortex's break-even point depends on the sales mix and the unit contribution margins of the individual products. The first step in the break- even computation is determining the weighted-average contribution mar- gin per unit: Source: Principles of Cost Accounting, 15th Edition, Edward J. VanDerbec p. 498 a) BEP in units in total b) BEP in units separately (for each product) BEP in $ in total BEP in $ separately (for each product) (Product A unit contribution x Product A units sold) + (Product B unit contribution x Product B units sold) Product A units sold + Product B units sold

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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a) b) Product- A... B Total C) d) Assume that adding Product B results in no increase to Vortex's fixed costs of $15,000 and that the unit sales prices, unit variable costs, and unit contribution margins are as follows: Product B Unit Sales Price $10 15 Unit Sales 10,000 6,000 16,000 Weighted-average contribution margin per unit Unit Variable Cost $7 10 Vortex's break-even point depends on the sales mix and the unit contribution margins of the individual products. The first step in the break- even computation is determining the weighted-average contribution mar- gin per unit: Unit Contribution Margin $3 5 Source: Principles of Cost Accounting, 15th Edition, Edward J. VanDerbec p. 498 BEP in units in total BEP in units separately (for each product) BEP in $ in total BEP in S separately (for each product) (Product A unit contribution x Product A units sold) + (Product B unit contribution x Product B units sold) Product A units sold + Product B units sold
Transcribed Image Text:a) b) Product- A... B Total C) d) Assume that adding Product B results in no increase to Vortex's fixed costs of $15,000 and that the unit sales prices, unit variable costs, and unit contribution margins are as follows: Product B Unit Sales Price $10 15 Unit Sales 10,000 6,000 16,000 Weighted-average contribution margin per unit Unit Variable Cost $7 10 Vortex's break-even point depends on the sales mix and the unit contribution margins of the individual products. The first step in the break- even computation is determining the weighted-average contribution mar- gin per unit: Unit Contribution Margin $3 5 Source: Principles of Cost Accounting, 15th Edition, Edward J. VanDerbec p. 498 BEP in units in total BEP in units separately (for each product) BEP in $ in total BEP in S separately (for each product) (Product A unit contribution x Product A units sold) + (Product B unit contribution x Product B units sold) Product A units sold + Product B units sold
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