Answer:
The question is incomplete. The complete question is given below:
Selling Price per unit Variable cost per unit
Product
Trunk Switch $60.00 $28.00
Gas door $75.00 $33.00
Glove Box $40.00 $22.00
Answer Trunk 240 units, Gas 240 units and Box 60 units
Explanation:
The break-even point is the activity level where the total revenue of a business exactly equals its cost. At the break-even point, <em>the total profit made will be zero</em>. This analysis enables a firm to determine ahead the number of units to must be produced, customers that must served in order to cover its fixed costs.
Calculation
A break-even point can be calculated as follows:
For single-product scenario:
Break-even point (in units)= Total general fixed cost for the period/ (selling price-variable cost )
Multiple-products scenario= Total general fixed cost for the period/Average contribution per unit
Total general fixed costs are period costs which remain unchanged within a given activity level and cannot be traced to be incurred for a particular product.
Trunk Gas Box
$ $ $
Selling price 60 75 40
Variable cost (28) (33) (22)
Contribution per unit 32 42 18
Cont. from a mix (sp×unit) 128 168 18
Average cont. per mix = (128+168+18)/(4+4+1)= $34.89
Break-even point (in units)= $18,840/$34.89
= 540 units
Total units to be sold to break even is 540 units. This will be distributed across the three products using the sales mix as follows:
Trunk = 4/9× 540 units= 240 units
Gas = 4/9 × 540 = 240 units
Box = 1/9 *540 = 60 units
