Waterside Company sells two products,Yellow models and Striped models.Yellow models sell for $50 per unit with variable costs of $30 per unit.Striped models sell for $60 per unit with variable costs of $25 per unit.Total fixed costs for the company are $20,000.Waterside Company typically sells one yellow model for every three striped models.What is the breakeven point in total units?

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The breakeven point is the point at which total revenue equals total costs. To calculate the breakeven point, we need to know the total variable costs, the total fixed costs, and the selling price per unit.The total variable costs are the sum of the variable costs for each product. The variable costs for Yellow models are $30 per unit, and the variable costs for Striped models are $25 per unit. Since Waterside Company typically sells one Yellow model for every three Striped models, the total variable costs are:Total variable costs = (1 * $30) + (3 * $25) = $105 per unitThe total fixed costs are $20,000.The selling price per unit is the average selling price of the two products. The selling price of Yellow models is $50 per unit, and the selling price of Striped models is $60 per unit. Since Waterside Company typically sells one Yellow model for every three Striped models, the average selling price per unit is:Average selling price per unit = (1 * $50) + (3 * $60) = $65 per unitThe breakeven point is the point at which total revenue equals total costs. Total revenue is equal to the selling price per unit multiplied by the number of units sold. Total costs are equal to the total variable costs plus the total fixed costs. Therefore, the breakeven point is:Breakeven point = Total fixed costs / (Selling price per unit - Total variable costs)Breakeven point = $20,000 / ($65 - $105)Breakeven point = 640 unitsTherefore, the breakeven point in total units is 640 units.

Waterside Company Sells Two Products,Yellow Models and Striped Models