Question

Lakeside has gathered the following data in order to calculate the weighted-average breakeven point: Unit Sales Price Unit Variable Costs Unit Sales Product A $150 $100 8,000 Product B 100 60 2,000 Fixed costs incurred is $480,000 The weighted-average breakeven point is:
a.10,667 units.
b.11,429 units.
c.5,333 units.
d.10,000 units.

Answer 1

Answer:

The correct answer is option (d).

Explanation:

According to the scenario, the given data are as follows:

Product A sales price = $150

Product A Variable price = $100

Sales percentage of product A = 0.80

So, Weighted average = ( Product A sales price - Product A Variable price) × Sales percentage of product A

= ( $150 - $100) × 0.80

= 40

Similarly, Product B sales price = $100

Product B Variable price = $60

Sales percentage of product B = 0.20

So, Weighted average = ( Product B sales price - Product B Variable price) × Sales percentage of product B

= ( $100 - $60) × 0.20

= 8

Total weighted average = 40 + 8 = 48

Hence, the weighted average breakeven point can be calculated by using following formula:

Weighted-average breakeven point = Fixed Cost ÷ Total weighted average

= $480,000 ÷ 48

= 10,000 units