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# (Solved): Break-Even Point in Units for a Multiple-Product FirmSuppose that Chillmax Company now sells both pa ...

Break-Even Point in Units for a Multiple-Product Firm

Suppose that Chillmax Company now sells both pairs of shoes and fabric carryalls. The pairs of shoes are priced at \$60 and have variable costs of \$21 each. The carryalls are priced at \$36 and have variable costs of \$9 each. Total fixed cost for Chillmax as a whole equals \$91,500 (includes all fixed factory overhead and fixed selling and administrative expense). Next year, Chillmax expects to sell 3,500 pairs of shoes and 875 carryalls.

Required:

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1. Form a package of shoes and carryalls based on the sales mix expected for the coming year.

 Product Price – UnitVariableCost = UnitContributionMargin × SalesMix = PackageUnitContributionMargin Shoes \$fill in the blank 328ac1fe3068065_1 \$fill in the blank 328ac1fe3068065_2 \$fill in the blank 328ac1fe3068065_3 fill in the blank 328ac1fe3068065_4 \$fill in the blank 328ac1fe3068065_5 Carryall fill in the blank 328ac1fe3068065_6 fill in the blank 328ac1fe3068065_7 fill in the blank 328ac1fe3068065_8 fill in the blank 328ac1fe3068065_9 fill in the blank 328ac1fe3068065_10 Package total \$fill in the blank 328ac1fe3068065_11

2. Calculate the break-even point in units for pairs of shoes and for carryalls.

Break-Even Pairs of Shoes fill in the blank 328ac1fe3068065_12 units

Break-Even Carryalls fill in the blank 328ac1fe3068065_13 units

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3. Check your answer by preparing a contribution margin income statement. Enter all amounts as positive value.

 blank Total blank blank Sales \$fill in the blank e3213303a024fe9_1 blank blank Total variable cost fill in the blank e3213303a024fe9_2 blank blank Total contribution margin \$fill in the blank e3213303a024fe9_3 blank blank Total fixed cost fill in the blank e3213303a024fe9_4 Operating income \$fill in the blank e3213303a024fe9_5 blank blank

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