Asked by
valeria mejia
on Oct 15, 2024
Verified
McCoy Brothers manufactures and sells two products,A and Z in the ratio of 5:2.Product A sells for $75; Z sells for $95.Variable costs for product A are $35; for Z $40.Fixed costs are $418,500.Compute the break-even point in composite units.
A) 2,092.
B) 3,805.
C) 1,350.
D) 1,395.
E) 1,550.
Sales Ratio
A metric that compares a particular figure or cost to the total sales, providing insight into various financial aspects of a business.
Variable Costs
Expenditures that fluctuate based on the volume of output or services provided by an enterprise.
Break-Even Point
The point at which total costs and total revenue are equal, leading to neither profit nor loss.
- Implement break-even analysis across varying sales compositions and product situations.
- Compute and explain the composition of sales mix and its impact on total profit margins.
- Acquire knowledge of the contribution margin on a per-unit basis and the application of composite units in the context of multiple products.
Verified Answer
PM
Learning Objectives
- Implement break-even analysis across varying sales compositions and product situations.
- Compute and explain the composition of sales mix and its impact on total profit margins.
- Acquire knowledge of the contribution margin on a per-unit basis and the application of composite units in the context of multiple products.