Proops Company has a weighted-average unit contribution margin of $30 for its two products: Drew and Carey.Expected sales for Proops are 40,000 Drews and 60,000 Careys.Fixed expenses are $1,800,000.How many Drews would Proops sell at the break-even point?

Question

Quizplus · Accepted Answer

To find the break-even point in units for a specific product when given a weighted-average unit contribution margin, we first calculate the total units needed to break even. The formula for the break-even point in units is Total Fixed Expenses / Weighted-Average Unit Contribution Margin. Here, it's $1,800,000 / $30 = 60,000 units (total units needed to break even for both products combined). Since the question asks for the number of Drews at the break-even point and we know the sales mix, we can't directly calculate Drews only without knowing their individual contribution margins or selling prices. However, given the options and the context, assuming a proportional relationship or a misunderstanding of the question's intent, option A) 24,000 is the closest to a logical answer, but technically, with the information provided, calculating the exact break-even point for Drews alone isn't possible. This answer is based on an interpretation of the question that might not fully align with the intended calculation method due to the lack of specific data on the individual contribution margins or selling prices of Drew and Carey.

Proops Company Has a Weighted-Average Unit Contribution Margin of $30