Mabel Co manufactures and sells tables and chairs in a standard mix of one table to four chairs.
The following information is available:
| Product | Table | Chair |
|---|---|---|
| Variable cost per unit ($) | 120 | 16 |
| Contribution sales ratio | 0.4 | 0.6 |
Annual fixed costs are $100,000.
What is the break-even point in sales revenue (to the nearest hundred dollars)?
A. $210,500
B. $178,600
C. $200,000
D. $204,500
A company makes and sells product X and product Y. Twice as many units of product Y are made and sold as that of product X. Each unit of product X makes a contribution of $10 and each unit of product Y makes a contribution of $4. Fixed costs are $90,000.
What is the total number of units which must be made and sold to make a profit of $45,000?
A. 7,500
B. 22,500
C. 15,000
D. 16,875
| P1 | P2 | |
|---|---|---|
| $ | $ | |
| Selling price | 10·00 | 8·00 |
| Cost per unit: | ||
| Direct materials | 3·50 | 4·00 |
| Direct labour | 1·50 | 1·00 |
| Variable overhead | 0·60 | 0·40 |
| Fixed overhead | 1·20 | 1·00 |
| Profit per unit | 3·20 | 1·60 |
| Product P1 | 10,000 units |
| Product P2 | 12,500 units |
If only product P1 were to be made, how many units (to the nearest whole unit) would need to be sold in order to achieve a profit of $60,000 each year?
A. 25,625 units
B. 19,205 units
C. 18,636 units
D. 26,406 units