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Homework answers / question archive / Handy Home sells windows and doors in the ratio of 7:3 (Windows doors)
Handy Home sells windows and doors in the ratio of 7:3 (Windows doors). The selling price of each window is $119 and of each door is $269. The variable cost of a window is $7200 and of a door is $184.50. Fixed costs are $320,375. (Enter your "per unlt" values in two decimal places.) (1) Determine the selling price per composite unit Quantity Selling Price per unit Windows Doors Total per composite unit (2) Determine the variable costs per composite unit Quantity Variable costs per unit Windows Doors Total per composite unit Contribution margin per composite unit Contribution margin (3) Determine the break-even point in composite units Choose Numerator: Choose Denominator = Break Even Units Break even units (4) Determine the number of units of each product that will be sold at the break-even point Number of composite units Quantity Unit sales at break-even point break over Windows Doom
| 1. Determine the Selling price per Composite unit | ||||||
| Quantity | Selling price per unit | Total per Composite unit | ||||
| Windows | 7 | $ 119 | $ 833 | |||
| Doors | 3 | $ 269 | $ 807 | |||
| $ 1,640 |
| 2. Determine the Variable costs per Composite unit | ||||||
| Quantity | Variable cost per unit | Total per Composite unit | ||||
| Windows | 7 | $ 72 | $ 504 | |||
| Doors | 3 | $ 184.50 | $ 554 | |||
| $ 1,058 | ||||||
| Contribution margin per unit | ||||||
| Sales | $ 1,640 | |||||
| Less | Variable costs | $ 1,058 | ||||
| Contribution margin | $ 582 |
| 3 Determine the Break - even poin in Composite unit | ||||||
| Choose Numerator | / | Choose Denominator | = | Break -even Units | ||
| Total fixed costs | / | Contribution margin per unit | = | Break -even Units | ||
| $ 320,375 | / | $ 582 | = | 550 | Composite units | |
| 4. Determine the number of units of each product that will be sold at the break- even point | ||||||
| Quantity | Number of composite units to break-even | Unit sales at Break-even point | ||||
| Windows | 7 | 550 | 3,850 | Windows | ||
| Doors | 3 | 550 | 1,650 | Doors | ||
| Total | 5,500 | Total |
