Question - The Wilcox Company sells 2 products, A and B, with contribution margin ratios of 40 and 30% and selling prices of of $5.00 and $2.50 a unit. Fixed costs amount to $72,000 a month. Monthly sales average 30,000 units of product A and 40,000 of product B.
Required:
a) Assuming that three units of product A are sold for every four units of product B, calculate the dollar sales volume necessary to break-even.
b) As part of its cost accounting routine, Wilcox Company assigns $36,000 in fixed costs to each product each month. Calculate the break-even dollar sales volume for each project.