Answer:
the breakeven point is 875 units
Explanation:
Data provided:
selling cost of large landscaping tiles = $90 per unit
Variable cost of large landscaping tiles = $30 per unit
selling cost of medium landscaping tiles = $60 per unit
variable costs of medium landscaping tiles = $30 per unit
Total fixed costs for the company = $42,000
Landscape Company sells three large tiles for every two medium tiles
i.e large : medium tiles = 3 : 2
let the number of tiles sold be x
and, large tiles sold be =
and medium tiles sold = thus,
Total cost involved = total fixed cost + Total variable cost
= $42,000 +
Total cost involved = $42,000 + 30x
Total sales =
Total sales = ( 18 × 3x ) + ( 12 × 2x )
= 54x + 24x
= 78x ..........(3)
Now,
at breakeven point, the total sales is equal to the total cost
thus,
$42,000 + 30x = 78x
⇒ $42,000 = 48x
or
⇒ x = 875 units
Hence, the breakeven point is 875 units