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Beyond Technologies Corp
Beyond Technologies Corp. has the following data available from its operations:
Selling price per unit $227.5
Direct materials cost per unit $70
Processing and assembly costs per unit $52.5
Batch setup and assembly costs $11,375
Fixed manufacturing and administrative costs $5,075,000
How many units per batch is needed to earn a contribution per batch of $50,000?
Expert Solution
Computation of the number of units per batch:-
Variable cost per unit = Direct materials cost per unit + Processing and assembly cost per unit
= $70 + $52.5
= $122.5
Contribution margin per unit = Selling price per unit - Variable cost per unit
= $227.5 - $122.5
= $105
Break even point in units = (Batch setup & assembly costs + Fixed manufacturing & administrative costs + Contribution) / Contribution margin per unit
= ($11,375 + $5,075,000 + $50,000) / $105
= $5,136,375 / $105
= 48,917.86 Or 48,918 units
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