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Helen [10]
3 years ago
14

Yard Tools manufactures lawnmowers, weed-trimmers, and chainsaws. Its sales mix and unit contribution margin are as follows. Sal

es Mix Unit Contribution Margin Lawnmowers 20 % $33 Weed-trimmers 50 % $22 Chainsaws 30 % $41 Yard Tools has fixed costs of $4,544,800. Compute the number of units of each product that Yard Tools must sell in order to break even under this product mix. Lawnmowers units Weed-trimmers units Chainsaws units
Business
1 answer:
Korvikt [17]3 years ago
8 0

Answer:

Results are below.

Explanation:

<u>To calculate the break-even point in units, we need to use the following formula:</u>

Break-even point (units)= Total fixed costs / Weighted average contribution margin

Weighted average contribution margin= 0.2*33 + 0.5*22 + 0.3*41

Weighted average contribution margin= $29.9

Break-even point (units)= 4,544,800 / 29.9

Break-even point (units)= 152,000 units

<u>Now, for each product:</u>

<u></u>

Lawnmowers= 0.2*152,000=30,400

Weed-trimmers= 0.5*152,000= 76,000

Chainsaws= 0.3*152,000= 45,600

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