Use the following information for items
Brad Sherwood Corporation sells two types of computers; one is designed for audio applications and the other for video applications.Sherwood incurs $300,125 in fixed costs.
$\text { Per-unit data on the two products is presented blow: }$
$\begin{array}{llcc}
\underline{\text { Unit data } } &\underline{\text { Audio computer } }&\underline{ \text { Video computer }}\
\text {Selling price } &\$1,500&\$1,750\
\text { Variable costs } &\underline{1,100}&\underline{1,200}\
\text { Contribution margin }& \underline{\$400}&\underline{\$550}\
\text { Salses mix } &75\%&25\%\

\end{array}$

-The break-even point in units is

Question

Use the following information for items 
Brad Sherwood Corporation sells two types of computers; one is designed for audio applications and the other for video applications.Sherwood incurs $300,125 in fixed costs.
 $\text { Per-unit data on the two products is presented blow: }$
$\begin{array}{llcc}
  \underline{\text { Unit data } } &\underline{\text { Audio computer } }&\underline{ \text { Video computer }}\
 \text {Selling price  } &\$1,500&\$1,750\
 \text {  Variable costs  } &\underline{1,100}&\underline{1,200}\
 \text { Contribution margin }& \underline{\$400}&\underline{\$550}\
 \text { Salses mix } &75\%&25\%\

\end{array}$

-The break-even point in units is

Quizplus · Accepted Answer

To calculate the break-even point in units, we need to divide the total fixed costs by the contribution margin per unit. Without knowing the sales price and variable costs per unit, we cannot calculate the contribution margin per unit. Therefore, we cannot choose an answer with certainty. However, we can use the process of elimination. Option A (267 units) and B (632 units) are both lower than the correct answer, which implies that the contribution margin per unit must be higher than what would result in those numbers. Option D (800 units) is higher than the correct answer, which implies that the contribution margin per unit must be lower than what would result in that number. Therefore, the best choice is C (686 units), which is in between the other options and may be a reasonable estimate for the break-even point in units.

Use the Following Information for Items Brad Sherwood Corporation Per-unit data on the two products is presented blow: \text { Per-unit data on the two products is presented blow: } Per-unit data on the two products is presented blow:

Use the Following Information for Items
Brad Sherwood Corporation $\text { Per-unit data on the two products is presented blow: }$