Answer:
Break-even point= 1,200 DVDs
Explanation:
F<u>irst, we need to calculate the sales proportion:</u>
DVD= 4/5= 0.8
Home entertainment= 1/5= 0.2
<u>Now, we need to calculate the break-even point for the whole company:</u>
Break-even point (units)= Total fixed costs / Weighted average contribution margin
Weighted average contribution margin= (weighted average selling price - weighted average unitary variable cost)
Weighted average contribution margin= (200*0.8 + 600*0.2) - (160*0.8 + 460*0.2)
Weighted average contribution margin= 60
Break-even point (units)= 90,000/60= 1,500
<u>Finally, the number of DVDs:</u>
DVD= 1,500*0.8= 1,200 DVDs
