Question

Bramble Corp. has a weighted-average unit contribution margin of $30 for its two products, Standard and Supreme. Expected sales for Bramble are 60000 Standard and 40000 Supreme. Fixed expenses are $2400000. How many Standards would Bramble sell at the break-even point

Answer 1

Answer:

160,000 units

Explanation:

Step 1 : Determine the Sales Mix

Bramble : Standard

60000 : 40000

3 : 2

Step 2 : Determine the Overall Break even Point

Break even Point = Fixed Cost ÷ Contribution per unit

                             = $2400000 ÷ $30

                             = 80,000

Step 3 : Determine break-even point for Standards

Standards Break even point = 80,000 x 2

                                               = 160,000 units

Thus,

Bramble Corp would sell 160,000 units of Standards at the break-even point