Answer:
Lawnmowers= 45,726
Weed-trimmers= 114,314
Chainsaws= 68,589
Explanation:
Giving the following information:
Sales Mix - Unit Contribution Margin
Lawnmowers 20 % $34
Weed-trimmers 50 % $24
Chainsaws 30 % $37
Yard total has fixed cost of $6,836,000
Based on the weighted average sales participation and the unit contribution margin, we can calculate the weighted average contribution margin for the whole company. We need it to calculate the break-even point in units.
Break-even point (units)= Total fixed costs / (weighted average selling price - weighted average variable expense)
Weighted average contribution margin= sales participation per product* unitary contribution margin
Weighted average contribution margin= (0.20*34) + (0.5*24) + (0.3*37)= 29.9
Break-even point (units)= 6,836,000/ 29.9= 228,629 units
<u>Now, we can calculate the required units for each product:</u>
Lawnmowers= 0.20*228,629= 45,726
Weed-trimmers= 0.50*228,629= 114,314
Chainsaws= 0.3*228,629= 68,589
