Sales Mix For Product A SPu 10 VCu 7 budget sales units 60

Sales Mix

For Product A: SP/u = $10; VC/u = $7, budget sales (units) 6,000

For Product B: SP/u = $18; VC/u = $14, budget sales (units) 18,000

Total Fixed costs = $75,000

Find BEP in $ and units for A and B

Solution

Total budgeted sales = Budgeted sales for Product A + Budgeted sales for Product B = 6,000+18,000 = 24,000 units

Weighted average Contribution margin per unit = 0.75+3 = $3.75

Break even point in unit of sales mix = Fixed cost ÷ Weighted average Contribution margin per unit = 75,000÷3.75 = 20,000 units