Answer:
The 3,448 units of Q-Drive would be required to sold at the break-even point.
Explanation:
For computing the how many units is to be sold at the break even point, first we have to calculate the contribution margin after that break even point is to be calculated, and than finally sale units is calculated.
1. Contribution : The contribution margin is a difference between selling price and variable cost per unit.
In mathematically,
Contribution margin = Selling price - variable cost per unit
So, for Q Drive, the contribution margin will be
= $150 - $90 = $60 per unit
Hence, the contribution margin for Q Drive is $60 per unit
Now, for Q Drive Plus , the contribution margin will be
= $195 - $105 = $80 per unit
Hence, the contribution margin for Q Drive Plus is $80 per unit
Now, the break even point is
= Fixed cost ÷ Total contribution margin
where,
Total contribution margin = sales mix 30% of contribution margin for Q Drive +sales mix 70 % of contribution margin for Q Drive Plus
= 30% × $60 + 70% × $80 = $74 per unit
Hence, the total contribution margin is $74 per unit
So, break even point is $850,500 ÷ $74 per unit = 114,93 units
So, sale value of units = 30% sales mix of break even point
= 30% × 114,93 units
= 3,448 units.
Thus, the 3,448 units of Q-Drive would be required to sold at the break-even point.
