Assume that Corn Co. sold 8,000 units of Product A and 2,000 units of Product B during the past year. The unit contribution margins for Products A and B are $30 and $60, respectively. Corn has fixed costs of $378,000. The break-even point in units is
A) 8,000 units
B) 6,300 units
C) 12,600 units
D) 10,500 units

Question

Quizplus · Accepted Answer

To find the break-even point in units, calculate the weighted average contribution margin per unit: [(8,000 units * $30) + (2,000 units * $60)] / 10,000 units = $36. Then, divide the total fixed costs by this weighted average contribution margin: $378,000 / $36 = 10,500 units.

Assume That Corn Co