Jackson Manufacturers has provided the following information regarding the two products that it sells: $$\begin{array} { | l | r | r | }
\hline & \text { Jet Boats } & \text { Ski Boats } \
\hline \text { Sales price per unit } & \$ 10,000 & \$ 24,000 \
\hline \text { Variable cost per unit } & \$ 4,800 & \$ 18,000 \
\hline
\end{array}$$ Annual fixed costs are $300,000.
How many units must be sold in order for Jackson to break even,assuming that Jackson sells five jet boats for every two ski boats sold? (Round any intermediate calculations to two decimal places,and your final answer to the nearest unit. )

Question

Jackson Manufacturers has provided the following information regarding the two products that it sells: $$\begin{array} { | l | r | r | } 
\hline & \text { Jet Boats } & \text { Ski Boats } \
\hline \text { Sales price per unit } & \$ 10,000 & \$ 24,000 \
\hline \text { Variable cost per unit } & \$ 4,800 & \$ 18,000 \
\hline
\end{array}$$ Annual fixed costs are $300,000.
How many units must be sold in order for Jackson to break even,assuming that Jackson sells five jet boats for every two ski boats sold? (Round any intermediate calculations to two decimal places,and your final answer to the nearest unit. )

Quizplus · Accepted Answer

To find the break-even point, calculate the weighted average contribution margin per unit, considering the sales mix. The contribution margin for jet boats is $5,200 ($10,000 - $4,800) and for ski boats is $6,000 ($24,000 - $18,000). The sales mix is 5 jet boats for every 2 ski boats. The weighted average contribution margin is: (5/7 * $5,200) + (2/7 * $6,000) = $5,428.57. The break-even point in units is $300,000 / $5,428.57 ≈ 55.25 units. With the sales mix, this translates to approximately 39 jet boats and 16 ski boats.

Jackson Manufacturers Has Provided the Following Information Regarding the Two