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Homework answers / question archive / Figg Inc
Figg Inc. has fixed costs of $420,000. 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
L$100$80$20
M 80 62 18
The sales mix for products L and M is 60% and 40%, respectively. Determine the break even point in units of L and M.
Unit selling price of E: [($100 × 0.60) + ($80 × 0.40)] = $ 92.00
Unit variable cost of E: [($80 × 0.60) + ($62 × 0.40)] = 72.80
Unit contribution margin of E: = $ 19.20
Break-Even Sales (units) = 21,875 units = $420,000/$19.20
21,875 units of E × 60% = 13,125 units of Product L
21,875 units of E × 40% = 8,750 units of Product M
