Smith company can produce two types of carpet cleaners, Ask an Expert

Accounting

Smith Company can produce two types of carpet cleaners, Brighter and Cleaner. Data on these two products are as follows:

Brighter Cleaner

Sales volume in units 440 660

Unit sales price $825 $1,100

Unit variable cost 330 495

The number of machine-hours to produce one unit of Brighter is 1 while the number of machine-hours for each unit of Cleaner is 2. Total fixed costs for the manufacture of both products are $240,000.

Required:

1. Using a spreadsheet, determine the breakeven point in total units for Smith Company, assuming that the sales mix (based on physical volume) remains constant. (Round "Sales mix (based on units)" and "Weighted average contribution margin/unit" to 2 decimal places. Round your final answer for "Total units to breakeven" up to the nearest whole unit.)

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Financial Accounting, Accounting

Category:- Financial Accounting
Reference No.:- M92048357

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