Your fixed Cost = $5,800,000
Second, you need to determine you Weighted average Contribution Margin and since the breakeven you are looking at is in dollars and not units so:
CM ratio for product 1 = ($12Mio - $4.8Mio)/$12Mio = 0.6
CM ratio for product 2 = ($3Mio - $1.5)/ $3Mio = 0.5
W1 = $12Mio /$15Mio = 80%
W2 = $3Mio/$15Mio = 20%
WACM = (0.8*0.6) + (0.2*0.5) = 0.58
Breakeven in Sales = FC/WACM = $5,800,000/0.58 = $10,000,000
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Jean Gerges
Lebanon
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Original Message:
Sent: 01-11-2023 03:48 PM
From: Sameh Mahmoud Ismail
Subject: csv question need help
A company sells two products with the following results for the year just ended.
| Product 1 | Product 2 | | Sales | $12,000,000 | $3,000,000 | | Variable costs | 4,800,000 | 1,500,000 | | Fixed costs | 5,400,000 | 400,000 |
Assuming the product mix and the sales mix remain the same, the company's
breakeven point in sales dollars is |
| A. | $12,100,000 | | B. | $13,810,000 | | C. | $10,000,000 | | D. | $9,800,000 |
|
why the answer c
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Sameh Mahmoud Ismail
Accountant
Giza
Egypt
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