Konerko Company sells two types of computer chips The sales

Konerko Company sells two types of computer chips. The sales mix is 20% (Q-Chip) and 80% (Q-Chip Plus). Q-Chip has a contribution margin per unit of $24 and Q-Chip Plus has a contribution margin per unit of $48. Konerko\'s fixed costs are $540,000. How many units of Q-Chip would be sold at the break-even point? 7,500 2,500 108,000 10,000

Solution

Answer

Q Chips

Q Chips Plus

Sales Mix

20%

80%

Unit Contribution

$                                     24.00

$                      48.00

Weighted Average Unit Contribution

$                                        4.80

$                       38.40

Total Weighted Average unit Contribution

[4.8 + 38.4]

$                       43.20

Total Fixed Cost

[given]

$             540,000.00

Total no. of Break Even Units

[540000 / 43.2]

                        12,500 units

Sales Mix of Q Chips

20%

Units sold of Q chips at Break Even point [Answer]

[12500 x 20%]

                           2,500 units