Breakeven point for two products: The Breakeven point is level of sales at which the net profit is zero. In other words, the breakeven point is the amount of sales at which there no loss and no profit. The formula to calculate breakeven point for two products is as follows: B r e a k e v e n p o i n t ( U n i t s ) = T o t a l F i x e d c o s t s W e i g h t e d A v e r a g e c o n t r i b u t i o n m a r g i n p e r u n i t Weighted average contribution margin per unit is calculated as follows: W e i g h t e d a v e r a g e c o n t r i b u t i o n m a r g i n p e r u n i t = ( C o n t r i b u t i o n m a r g i n o f p r o d u c t A × w e i g h t o f p r o d u c t A ) + ( C o n t r i b u t i o n m a r g i n o f p r o d u c t B × w e i g h t o f p r o d u c t B ) To determine: The breakeven point for total guests, regular guests and discount guests.

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Chapter 21, Problem 10QC

To determine

Concept introduction:

Breakeven point for two products: The Breakeven point is level of sales at which the net profit is zero. In other words, the breakeven point is the amount of sales at which there no loss and no profit. The formula to calculate breakeven point for two products is as follows:

$B r e a k e v e n p o i n t (U n i t s) = \frac{T o t a l F i x e d c o s t s}{W e i g h t e d A v e r a g e c o n t r i b u t i o n m a r g i n p e r u n i t}$

Weighted average contribution margin per unit is calculated as follows:

$\begin{array}{l} W e i g h t e d a v e r a g e c o n t r i b u t i o n m a r g i n p e r u n i t = (C o n t r i b u t i o n m a r g i n o f p r o d u c t A \times w e i g h t o f p r o d u c t A) \\ + (C o n t r i b u t i o n m a r g i n o f p r o d u c t B \times w e i g h t o f p r o d u c t B) \end{array}$

To determine: The breakeven point for total guests, regular guests and discount guests.

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