10 Assume the following facts for two products Zip and Zap S

10) Assume the following facts for two products, Zip and Zap: Sales mix Selling price per unit Variable costs per unit Zip Zap 3 units 1 unit $21.60 $28.80 $14.40 $16.80 If total fixed costs are $53,760, the break-even point in units would be A) 1,200 units of Zip and 400 units of Zap C) 1,600 units of Zip and 4,800 units of Zap B) 4,800 units of Zip and 1,600 units of Zap D) 8,400 units of Zip and 2,800 units of Zap

Solution

ANSWER = B) 4800 units of Zip and 1600 Units of Zap

Break- Even point = fixed cost / Contribution

= 53760 / 33.60

= 1600 Units

Therefore,

zip break even point = 1600*3 = 4800 units

Zap break even point = 1600 * 1 = 1600 units

Answer = b) 4800 units of Zip and 1600 units of Zap

	Zip	Zap
Salleing price per unit	21.60	28.80
Less- Variable cost per unit	14.40	16.80
Contribution per unit	7.20	12
Sales mix	3 units	1 unit
overall contribution	21.60	12
Total contribution	33.60