Following information is related to sales mix of Product A , B and C.
| Product | A (Rs) | B (Rs) | C (Rs) |
| Sales Price Per Unit | 15 | 21 | 36 |
| Variable Cost Per Unit | 9 | 14 | 19 |
| Sales Mix Percentage | 20% | 20% | 60% |
Total Fixed Cost= Rs 40,000
What is the total units of sales mix required to "break even"?
Answer & explanation
Correct answer: option 1
Break-even point in units of sales mix = Total fixed cost / Weighted average Contribution Mix (CM) per unit
Total Fixed cost= Rs 40,000
Weighted average CM per Unit= Rs 12.80
Break-even point in units of sales mix=40,000/12.80=3,175
Total Fixed cost= Rs 40,000
Weighted average CM per Unit= Rs 12.80
Break-even point in units of sales mix=40,000/12.80=3,175