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 the break-even point in sales units of Product AA and Product BB.

Question

Want to see the full answer?

Answer 1

Question

Chapter 21, Problem 21.5APE

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

the break-even point in sales units of Product AA and Product BB.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

Price, Variable Cost per Unit, Contribution Margin, Contribution Margin Ratio, Fixed Expense For each of the following independent situations, calculate the amount(s) required. Required: 1. At the break-even point, Jefferson Company sells 105,000 units and has fixed cost of $351,300. The variable cost per unit is $0.30. What price does Jefferson charge per unit? Note: Round to the nearest cent.$ 2. Sooner Industries charges a price of $119 and has fixed cost of $408,500. Next year, Sooner expects to sell 16,300 units and make operating income of $174,000. What is the variable cost per unit? What is the contribution margin ratio? Note: Round your variable cost per unit answer to the nearest cent. Enter the contribution margin ratio as a percentage, rounded to two decimal places. Variable cost per unit $ Contribution margin ratio % 3. Last year, Jasper Company earned operating income of $27,720 with a contribution margin ratio of 0.3. Actual revenue was $231,000. Calculate…

Sales Mix and Break-Even Analysis Jordan Company has fixed costs of $1,097,400. The unit selling price, variable cost per unit, and contribution margin per unit for the company's two products are provided below. Product Selling Price Variable Cost per Unit Contribution Margin per Unit $560 $340 220 $220 120 340 The sales mix for products Q and 2 is 35% and 65%, respectively. Determine the break-even point in units of Q and Z. If required, round your answers to the nearest whole number. a. Product Q b. Product 2 units units

Sales Mix and Break-Even Analysis Olmstead Company has fixed costs of $1,071,360. 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 $200 $200 550 470 80 The sales mix for Products QQ and ZZ is 40% and 60%, 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 X units b. Product ZZ X units