9514 1404 393
Answer:
1a: $84; 1b: 30,000A +15,000B; 1c: 37,000A +18,500B
2: 4,000 composite units
Step-by-step explanation:
We assume your "composite unit" consists of the smallest set of units in the ratio in which they are sold.
<h3>1) </h3>
A "composite unit" is 1B +2A. The contribution margins are the difference between the selling price and the variable cost per unit:
A: 72 -40 = 32
B: 48 -28 = 20
composite unit: 2A+B = 2(32) +20 = 84
(a) The contribution margin per composite unit is $84.
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(b) The break-even point is the number of composite units that have a total contribution margin equal to the total fixed costs:
84n = 1260000
n = 1260000/84 = 15000
30,000 units of A and 15,000 units of B must be sold to break even.
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(c) The additional number of composite units required to achieve pre-tax income of 294000 is ...
294,000/84 = 3500
37,000 units of A and 18,500 units of B must be sold for a pretax income of $294,000.
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<h3>2)</h3>
Contribution margins per unit are ...
H: 6 -4 = 2
C: 8 -6 = 2
I: 10 -7 = 3
A composite unit is 3H +2C +I, so the contribution margin per composite unit is ...
3(2) +2(2) +1(3) = 6 +4 +3 = 13 . . . dollars
The break-even point is 52,000/13 = 4,000 composite units
