Question

UP Forklifts sells two products, large forklifts and small forklifts. A large forklift sells for $80,000 per unit with variable costs of $24,000 per unit. Small forklifts sell for $60,000 per unit with variable costs of $11,000 per unit. Total fixed costs for the company are $3,528,000. UP Forklifts typically sells one large forklift for every four smalls. What is the breakeven point in total units

Answer 1

Answer:

The break-even point in total units is 70

Explanation:

Particulars                          Large Fork Lift        Small Fork Lift        Total

Selling price Per Unit              $80,000                  $60,000

Less: Variable Cost Per Unit $24,000                   $11,000  

Contribution per unit               $56,000                  $49,000

Sales Mix                                       1                                 4

Total Contribution per            $56,000                 $196,000    $252,000

sales mix  

Contribution per unit of sales mix ($252000/5)                         $50,400

Fixed Costs                                                                                    $3,528,000

Break-even point in total units ($3,528,000 / 50,400)                      70