Unit 1: Cost-Volume-Profit Analysis Economics Worksheet With Answers - Cma311s Notes, 2010 Page 11
ADVERTISEMENT
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27Solution to Example 5
Product
Sales price per unit
x Sales mix
= Weighted selling price
A
N$20
0,20
N$ 4
B
N$50
0,30
N$15
C
N$40
0,50
N$20
Weighted average selling price per unit
N$39
Break-even point in sales value
= Break-even point in units x Weighted average selling price per unit
= 7 000 x N$39
= N$273 000
Activity 4
A company manufactures and sells two products, X and Y. Forecast data for a year are:
Product X
Product Y
Sales (units)
80 000
20 000
Sales price (per unit)
N$12
N$8
Variable cost (per unit)
N$ 8
N$3
Annual fixed costs are estimated at N$273 000.
What is the break-even point in sales revenue with the current sales mix?
A N$570 000
B N$606 667
C N$679 467
D N$728 000
(Hint: First calculate the break-even point in units).
• By using the average contribution ratio
If the average contribution ratio is known, the break-even point in sales value can be computed by means of
the following formula:
Total fixed costs
Break-even point in sales value = Average contribution ratio
Example 6
Refer to Example 3 above
Required:
Calculate the break-even point in sales value by first computing the average contribution ratio.
Solution to Example 6
Average contribution per unit
Average contribution ratio = Average selling price per unit
N$11
= N$39
= N$0,28205
OR
11
ADVERTISEMENT
0 votes
Related Articles
Related forms
Related Categories
Parent category: Education