Sales mix : It refers to the relative distribution of the total sales among the number of products sold by a company. In other words, it is expressed as a percentage of units sold for each product with respect to the total units sold for all the products. Break-even Point: It refers to a point in the level of operations at which a company experiences its revenues generated is equal to its costs incurred. Thus, when a company reaches at its break-even point, it reports neither an income nor a loss from operations. The formula to calculate the break-even point in sales units is as follows: Break-even point in Sales ( units ) = Fixed Costs Contribution Margin per unit To determine: the break-even point in sales units of Product QQ and Product ZZ.

Question

Sales Mix and Break-Even Analysis Heyden Company has fixed costs of $392,700. 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 Margin per Unit QQ $400 $220 $180 ZZ 300 220 80 The sales mix for Products QQ and ZZ is 30% and 70%, respectively. Determine the break-even point in units of QQ and zZ. If required, round your answers to the nearest whole number. a. Product Q0 units b. Product ZZ units

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Question

Chapter 19, Problem 19.5BPE

To determine

Sales mix:

It refers to the relative distribution of the total sales among the number of products sold by a company. In other words, it is expressed as a percentage of units sold for each product with respect to the total units sold for all the products.

Break-even Point:

It refers to a point in the level of operations at which a company experiences its revenues generated is equal to its costs incurred. Thus, when a company reaches at its break-even point, it reports neither an income nor a loss from operations. The formula to calculate the break-even point in sales units is as follows:

Break-even point in Sales(units) =Fixed CostsContribution Margin per unit

To determine: the break-even point in sales units of Product QQ and Product ZZ.

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Sales Mix and Break-Even Analysis Heyden Company has fixed costs of $392,700. 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 Margin per Unit QQ $400 $220 $180 ZZ 300 220 80 The sales mix for Products QQ and ZZ is 30% and 70%, respectively. Determine the break-even point in units of QQ and zZ. If required, round your answers to the nearest whole number. a. Product Q0 units b. Product ZZ units

Sales Mix and Break-Even Analysis Heyden Company has fixed costs of $392,700. 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 Margin per Unit QQ $400 $220 $180 ZZ 300 220 80 The sales mix for Products QQ and ZZ is 30% and 70%, respectively. Determine the break-even point in units of QQ and Z. If required, round your answers to the nearest whole number. a. Product QQ units b. Product ZZ units く Previous Next

Sales Mix and Break-Even Analysis Heyden Company has fixed costs of $567,000. 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 Margin per Unit QQ $500 $340 $160 zZ 280 160 120 The sales mix for Products QQ and ZZ is 50% and 50%, respectively. Determine the break-even point in units of QQ and ZZ. If required, round your answers to the nearest whole number. a. Product QQ units b. Product ZZ units