Introduction:
Break Even Sales is very useful for determining the level at which organization is able to recover all its fixed expenses. Sometime when sales comprises of combination of products – then we have to calculate the Selling price of the standard Mix and calculate Break Even sales for the Selling price / contribution of the standard Mix.
To Calculate:
We are required to calculate the selling price of composite Unit.
![Check Mark](/static/check-mark.png)
Answer to Problem 21SP
Solution
The Selling price of Composite units is $ 4750
Explanation of Solution
Explanation:
The calculations are given here:
Business Solutions | ||||||
Answer S. No. | Details | Desk | Chair | Value Composite unit | ||
$ | No. | $ | No. | $ | ||
Selling Price | 1250 | 500 | ||||
Selling Qty | 3 | 2 | 5 | |||
1 | Sales Price Per composite unit | 4750 | ||||
Variable Cost Per Unit | 750 | 250 | ||||
Units | 3 | 2 | 5 | |||
2 | Variable Cost Per Composite Unit | 2750 | ||||
Contribution per Composite Unit | 2000 | |||||
Fixed Expenses | 120000 | |||||
3 | No of Composite Units to break even | 60 | ||||
4.1 | Sales of Desk | 60*3 | 180 | |||
4.2 | Sales of Chair | 60*2 | 120 |
Conclusion: Selling price of Composite unit is $ 4750
Introduction:
Break Even Sales is very useful for determining the level at which organization is able to recover all its fixed expenses. Sometime when sales comprises of combination of products – then we have to calculate the Selling price of the standard Mix and calculate Break Even sales for the Selling price / contribution of the standard Mix.
To Calculate:
We are required to calculate the Variable Cost of composite Unit.
![Check Mark](/static/check-mark.png)
Answer to Problem 21SP
Solution
The Variable Cost of Composite units is $ 2750
Explanation of Solution
Explanation:
The calculations are given here:
Business Solutions | ||||||
Answer S. No. | Details | Desk | Chair | Value Composite unit | ||
$ | No. | $ | No. | $ | ||
Selling Price | 1250 | 500 | ||||
Selling Qty | 3 | 2 | 5 | |||
1 | Sales Price Per composite unit | 4750 | ||||
Variable Cost Per Unit | 750 | 250 | ||||
Units | 3 | 2 | 5 | |||
2 | Variable Cost Per Composite Unit | 2750 | ||||
Contribution per Composite Unit | 2000 | |||||
Fixed Expenses | 120000 | |||||
3 | No of Composite Units to break even | 60 | ||||
4.1 | Sales of Desk | 60*3 | 180 | |||
4.2 | Sales of Chair | 60*2 | 120 |
Conclusion: Variable Cost of Composite unit is $ 2750.
Introduction:
Break Even Sales is very useful for determining the level at which organization is able to recover all its fixed expenses. Sometime when sales comprises of combination of products – then we have to calculate the Selling price of the standard Mix and calculate Break Even sales for the Selling price / contribution of the standard Mix.
To Calculate:
We are required to calculate the Break Even Point in composite Unit.
![Check Mark](/static/check-mark.png)
Answer to Problem 21SP
Solution
The Break even point in Composite unit is 60 Units.
Explanation of Solution
Explanation:
The calculations are given here:
Business Solutions | ||||||
Answer S. No. | Details | Desk | Chair | Value Composite unit | ||
$ | No. | $ | No. | $ | ||
Selling Price | 1250 | 500 | ||||
Selling Qty | 3 | 2 | 5 | |||
1 | Sales Price Per composite unit | 4750 | ||||
Variable Cost Per Unit | 750 | 250 | ||||
Units | 3 | 2 | 5 | |||
2 | Variable Cost Per Composite Unit | 2750 | ||||
Contribution per Composite Unit | 2000 | |||||
Fixed Expenses | 120000 | |||||
3 | No of Composite Units to break even | 60 | ||||
4.1 | Sales of Desk | 60*3 | 180 | |||
4.2 | Sales of Chair | 60*2 | 120 |
Conclusion: Break Even Point in composite units is 60 Units.
Introduction:
Break Even Sales is very useful for determining the level at which organization is able to recover all its fixed expenses. Sometime when sales comprises of combination of products – then we have to calculate the Selling price of the standard Mix and calculate Break Even sales for the Selling price / contribution of the standard Mix.
To Calculate:
We are required to calculate the Number of units sold for each product to achieve break Even.
![Check Mark](/static/check-mark.png)
Answer to Problem 21SP
Solution
We are required to sell 180 units of Desk and 120 units of Chair to achieve Break Even.
Explanation of Solution
Explanation:
The calculations are given here:
Business Solutions | ||||||
Answer S. No. | Details | Desk | Chair | Value Composite unit | ||
$ | No. | $ | No. | $ | ||
Selling Price | 1250 | 500 | ||||
Selling Qty | 3 | 2 | 5 | |||
1 | Sales Price Per composite unit | 4750 | ||||
Variable Cost Per Unit | 750 | 250 | ||||
Units | 3 | 2 | 5 | |||
2 | Variable Cost Per Composite Unit | 2750 | ||||
Contribution per Composite Unit | 2000 | |||||
Fixed Expenses | 120000 | |||||
3 | No of Composite Units to break even | 60 | ||||
4.1 | Sales of Desk | 60*3 | 180 | |||
4.2 | Sales of Chair | 60*2 | 120 |
Conclusion: We need to sell 180 Units of Modular Desk and 120 units of Office Chairs to achieve break even.
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Chapter 21 Solutions
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