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Elise Corporation has the following sales mix for its three products: A, 20%; B, 35%; and C, 45%. Fixed costs total $400,000 and the weighted-average contribution margin is $100. How many units of product A must be sold to break-even?

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Answer:

The numbers of product A must be sold to break-even are 800 units

Explanation:

The break-even point is calculated by using following formula:

Break-even point in units = Fixed expense/(Selling price per unit-Variable expense per unit)  = Fixed expense/weighted-average contribution margin per unit = $400,000/$100 = $4,000 units

Elise Corporation has the following sales mix for its three products: A, 20%; B, 35%; and C, 45%.

The numbers of product A must be sold to break-even = $4,000 x 20% = 800 units