McCoy Brothers manufactures and sells two products, A and Z in the ratio of 5:2

Accounting Aug 18, 2020

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

2,269.
4,255.
1,480.
1,534.
1,705.

Expert Solution

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

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