Sales Mix and Break-Even Analysis Olmstead Company has fixed costs of $459,200. The unit selling price, variable cost per unit, and contribution margin per unit for the company’s two products follow: Product Selling Price Variable Cost per Unit Contribution MarginperUnit QQ $40 $15 $25 ZZ 60 25 35 The sales mix for Products QQ and ZZ is 70% and 30%, respectively. Determine the break-even point in units of QQ and ZZ. a. Product QQ b. Product ZZ
Sales Mix and Break-Even Analysis Olmstead Company has fixed costs of $459,200. The unit selling price, variable cost per unit, and contribution margin per unit for the company’s two products follow: Product Selling Price Variable Cost per Unit Contribution MarginperUnit QQ $40 $15 $25 ZZ 60 25 35 The sales mix for Products QQ and ZZ is 70% and 30%, respectively. Determine the break-even point in units of QQ and ZZ. a. Product QQ b. Product ZZ
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Sales Mix and Break-Even Analysis
Olmstead Company has fixed costs of $459,200. The unit selling price, variable cost per unit, and contribution margin per unit for the company’s two products follow:
Product Selling Price Variable Cost per Unit Contribution MarginperUnit
QQ $40 $15 $25
ZZ 60 25 35
The sales mix for Products QQ and ZZ is 70% and 30%, respectively. Determine the break-even point in units of QQ and ZZ.
a. Product QQ
b. Product ZZ
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