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Roosevelt Corporation has a weighted-average unit contribution margin of $30 for its two products, Standard and Supreme. Expected sales for Roosevelt are 40,000 Standard and 60,000 Supreme. Fixed expenses are $1,800,000. How many Standards would Roosevelt sell at the break-even point?
A. 36,000
B. 40,000
C. 60,000
D. 24,000

Sagot :

abiolataiwo2015

Answer:

D. 24,000

Explanation:

Calculation to determine How many Standards would Roosevelt sell at the break-even point

First step

Total sales = 40000 + 60000

Total sales= 100000 units

Second step

Standard = 40000 / 100000

Standard= 0.4

Third step

Supreme = 60000 / 100000

Supreme= 0.6

Fourth step

Overall break even in units = 1800000 / 30

Overall break even in units= 60000 units

Now let calculate the Standards sales at break even point

Standards sales at break even point = 60000 *

0.4

Standards sales at break even point =24000 units

Therefore the Standards sales at break even point is 24000 units

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