Question

Sapphire sells two products: ordinary laptops and premium laptops. Ordinary laptops are priced at $650 each and premium laptops are priced at $1150 each. The variable cost per unit is $605 per Ordinary laptop and $1090 per premium laptop. Total fixed cost is $126,000. Sapphire's expected sales mix İS four ordinary laptops to one premium laptop. Calculate the break-even point in units for ordinary laptops.
a. 2,100 laptops
b. 525 laptops
c. 445 laptops
d. 1,900 laptops

Answer 1

Answer:

The break-even point in units for ordinary laptops is 2,100 units.

Explanation:

Contribution Margin per unit (ordinary) = Selling Price - Variable cost

                                                                 = $650 -$605

                                                                 = $45

Contribution Margin per unit (premium) = Selling Price - Variable cost                                        = $1,150 -$1,090

= $60

$45* 4x + $60x = Fixed Costs = $126,000

= 180x +60x = $126,000

=240x =$126,000 = 525 units

Ordinary computers = 4x

                                  = 4*525

                                  = 2,100 units

Therefore, The break-even point in units for ordinary laptops is 2,100 units.