Broadway Company produces and sells two models of calculators.The following monthly data are provided: $\begin{array}{lcc}
&\text{ Standard } &\text{ Premium} \
\text {Unit selling price}&\$ 100 & \$ 150 \
\text {Unit variable manufacturing cost}&\$ 60 & \$ 90 \
\text {Unit variable selling and administrative cost}& \$ 15 & \$ 30\
\text {Number of units produced and sold}& 3,000 & 1,000
\end{array}$

Total monthly fixed costs are expected to be $15,000.What is the break-even point in sales dollars at the expected sales mix? (Do not round intermediate calculations.)
A) $19,231
B) $43,478
C) $68,182
D) $64,286

Question

Broadway Company produces and sells two models of calculators.The following monthly data are provided: $\begin{array}{lcc}
&\text{ Standard } &\text{ Premium} \
  \text {Unit selling price}&\$ 100 & \$ 150 \
 \text {Unit variable manufacturing cost}&\$ 60 & \$  90 \
\text {Unit variable selling and administrative cost}& \$  15 &  \$ 30\
 \text {Number of units produced and sold}& 3,000 & 1,000
\end{array}$

Total monthly fixed costs are expected to be $15,000.What is the break-even point in sales dollars at the expected sales mix? (Do not round intermediate calculations.)
A) $19,231
B) $43,478
C) $68,182
D) $64,286

Quizplus · Accepted Answer

To calculate the break-even point in sales dollars at the expected sales mix, we first need to determine the weighted average contribution margin per unit and then use it to calculate the break-even point.1. Calculate the contribution margin per unit for each product:   - Standard: $100 - $60 - $15 = $25   - Premium: $150 - $90 - $30 = $302. Calculate the weighted average contribution margin per unit, considering the sales mix (3,000 units of Standard and 1,000 units of Premium):   - Total units = 3,000 + 1,000 = 4,000   - Weighted contribution = [(3,000 * $25) + (1,000 * $30)] / 4,000   - Weighted contribution = ($75,000 + $30,000) / 4,000 = $105,000 / 4,000 = $26.253. Calculate the break-even point in sales dollars:   - Break-even point = Total fixed costs / Weighted average contribution margin ratio   - First, find the weighted average selling price:     - Weighted selling price = [(3,000 * $100) + (1,000 * $150)] / 4,000 = ($300,000 + $150,000) / 4,000 = $450,000 / 4,000 = $112.50   - Contribution margin ratio = $26.25 / $112.50 = 0.2333   - Break-even point = $15,000 / 0.2333 = $64,286 (approximately)Therefore, the break-even point in sales dollars at the expected sales mix is approximately $64,286.

Broadway Company Produces and Sells Two Models of Calculators Total Monthly Fixed Costs Are Expected to Be $15,000