Camden Corporation sells three products (M, N, and O) in the following mix: 3:1:2. Unit price and cost data are:
$\begin{array}{lrrr}&M&N&O\
\text { Unit sales price } & \$ 7 & \$ 4 & \$ 6 \
\text { Unit variable costs } & 3 & 2 & 3
\end{array}$
Total fixed costs are $340,000. The break-even point in sales dollars for the current sales mix is:

Question

Camden Corporation sells three products (M, N, and O) in the following mix: 3:1:2. Unit price and cost data are: 
$\begin{array}{lrrr}&M&N&O\
\text { Unit sales price } & \$ 7 & \$ 4 & \$ 6 \
\text { Unit variable costs } & 3 & 2 & 3
\end{array}$
Total fixed costs are $340,000. The break-even point in sales dollars for the current sales mix is:

Quizplus · Accepted Answer

To find the break-even point in sales dollars, calculate the weighted average contribution margin per unit, then divide total fixed costs by this margin. The contribution margins are $4 for M, $2 for N, and $3 for O. The weighted average contribution margin is $3.67. Dividing $340,000 by $3.67 gives approximately $629,000.

Camden Corporation Sells Three Products (M, N, and O) in the Following