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Homework answers / question archive / McCoy Brothers manufactures and sells two products, A and Z in the ratio of 5:2
McCoy Brothers manufactures and sells two products, A and Z in the ratio of 5:2. Product A sells for $88; Z sells for $109. Variable costs for product A are $43; for Z $49. Fixed costs are $510,600. Compute the break-even point in composite units.
Multiple Choice
Composite contribution per unit= Sales price - Variable cost
= (88- 43)*5+ (109- 49)* 2
= 345
Break even points units= Fixed cost/ Composite contribution per unit
= 510600/ 345
= 1480
