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Part 1
The Pawlak Company has three product lines of beltslong dashA, B, and Clong dashwith contribution margins of $ 5, $ 4, and $ 3, respectively. The president foresees sales of 210 comma 000 units in the coming period, consisting of 30 comma 000 units of A, 120 comma 000 units of B, and 60 comma 000 units of C. The company's fixed costs for the period are $ 405 comma 000.
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Part 1
Requirement 1. What is the company's breakeven point in units, assuming that the given sales mix is maintained?
Begin by determining the sales mix. For every 1 unit of A,
4
units of B are sold, and
2
units of C are sold.
Part 2
Determine the formula used to calculate the breakeven point when there is more than one product sold, then enter the amounts in the formula to calculate the breakeven point in bundles.
Part 3
Fixed costs
÷
Contribution margin per bundle
=
Breakeven point in bundles
405000
÷
=
