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  • 1.  csv question need help

    Posted 01-11-2023 03:49 PM
    A company sells two products with the following results for the year just ended.
    Product 1 Product 2
    Sales $12,000,000 $3,000,000
    Variable costs 4,800,000 1,500,000
    Fixed costs 5,400,000 400,000
    Assuming the product mix and the sales mix remain the same, the company's
    breakeven point in sales dollars is

    A. $12,100,000
    B. $13,810,000
    C. $10,000,000
    D. $9,800,000


    why the answer c

    ------------------------------
    Sameh Mahmoud Ismail
    Accountant
    Giza
    Egypt
    ------------------------------


  • 2.  RE: csv question need help
    Best Answer

    Posted 01-12-2023 02:11 AM
    Hi Samesh

    Please see below-:

                                    Product 1                   Product 2


    Sales                         1200                              300

    % of Sales                   80%                             20%

    % of Contribution         60%                            50%


    BEP    =                      $5,400,000+$400,000        
                                   (80%*60%) + (20%*50%)

                                         =  $10,00,000






    ------------------------------
    SUDHIR LEVI
    Chief Financial Officer
    New Delhi
    India
    ------------------------------



  • 3.  RE: csv question need help

    Posted 01-13-2023 07:30 AM
    really thank you sir

    ------------------------------
    Sameh Mahmoud Ismail
    Accountant
    Giza
    Egypt
    ------------------------------

    Original Message


  • 4.  RE: csv question need help

    Posted 01-12-2023 09:56 AM
    Your fixed Cost = $5,800,000

    Second, you need to determine you Weighted average Contribution Margin and since the breakeven you are looking at is in dollars and not units so:

    CM ratio for product 1 = ($12Mio - $4.8Mio)/$12Mio = 0.6
    CM ratio for product 2 = ($3Mio - $1.5)/ $3Mio = 0.5

    W1 = $12Mio /$15Mio = 80%
    W2 = $3Mio/$15Mio = 20%

    WACM = (0.8*0.6) + (0.2*0.5) = 0.58​

    Breakeven in Sales = FC/WACM = $5,800,000/0.58 = $10,000,000


    ------------------------------
    Jean Gerges
    Lebanon
    ------------------------------



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