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1.Yegnaw company produces and sells two types of yoga - training products: how to videotapes and a basic equipment set (blocks, strap, and small pillows). Last year, yegnaw sold 14,500 videos and 7,250 equipment sets. Information on the two products is as follows:


Videos set

Equipment


Price

Br 17.14

Br 21.75


Variable cost per unit

5.80

8.70


Total fixed costs are Br 101,500.

Respuesta :

anthougo

(a) and (b) The computation of the break-even units for each product of Yegnaw Company is as follows:

                                                   Videos set     Equipment

Break-even point (units)               14,097           21,324

What is the break-even point?

The break-even point is an accounting term that shows that total revenue equals total expenses of Yegnaw Company.

The break-even point is the point at which the company does not make a profit or loss but the total revenues equal total variable and fixed costs.

It is computed as the fixed cost divided by the contribution margin. For multiple products, the break-even point can be computed by weighting the contribution margin as follows:

Data and Calculations:

                                               Videos set            Equipment

Quantity sold                              14,500                   7,250

Price                                          Br 17.14                Br 21.75

Variable cost per unit                  5.80                      8.70

Contribution margin per unit Br 11.34               Br 13.05

Total contribution margin  Br 164,430         Br 94,612.50 (Br 13.05 x 7,250)

Total contribution margin for 2 products = Br 259,042.50

Weighted average contribution ratio 63.5%         36.5% (Br94,612.50/Br 259,042.50 x 100)

Weighted average contribution margin

  per unit                                     Br 7.20 (Br 11.34 x 63.5%)  Br 4.76 (Br. 13.05 x 36.5%)

Total fixed costs = Br 101,500

                                                         Videos set     Equipment

Fixed costs = Br 101,500

Weighted average contribution margin Br. 7.20    Br. 4.76

Break-even point (units)                14,097              21,324

                                           (Br 101,500/Br 7.20)   (Br 101,500/Br 4.76)

= Fixed costs/Weighted average contribution margin per unit

Question Completion:

Compute the break-even quantity of each product.

a. Break-even DVDs

c. Break-even equipment sets

Learn more about the break-even point at https://brainly.com/question/21137380

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