Question

US-Mobile manufactures and sells two products, tablet computers and smartphones, in the ratio of 5:3. Fixed costs are $124,620, and the contribution margin per composite unit is $134. What number of each type of product is sold at the break-even point

Answer 1

Answer:

Tablets = 581 units

Smart phones = 349 units

Explanation:

Th Break even point in unit is calculated as;

= Total fixed costs / average contribution per unit

= $124,620 / $134

= 930 units

The 903 units should be sold in the proportion as seen below;

Tablet computer = 5 / (5 + 3) × 930

= 581 units

Smart phones = 3 / ( 5 + 3) × 930

= 349 units