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Homework answers / question archive / Golub Company has fixed costs of $100,000

Golub Company has fixed costs of $100,000

Accounting

Golub Company has fixed costs of $100,000. The unit selling price, variable cost per unit, and contribution margin per unit for the company’s two products are provided below.
Product.Selling Price..Variable Cost per Unit...contribution margin
 per Unit
X $30 $25 $ 5
Y 20 10 10
The sales mix for products X and Y is 75% and 25%, respectively. Determine the break even point in units of X and Y.

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Unit selling price of E: [($30 × 0.75) + ($20 × 0.25)]                            = $27.50

Unit variable cost of E: [($25 × 0.75) + ($10 × 0.25)]                           =   21.25

Unit contribution margin of E:                                                              = $  6.25

 

Break-Even Sales (units) = 16,000 units = $100,000/$6.25

16,000 units of E × 75% = 12,000 units of Product X

16,000 units of E × 25% =   4,000 units of Product Y

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