Answer:
Instructions are listed below.
Explanation:
Giving the following information:
Super Supreme
Sales price $108 $131
Variable cost per unit (59 ) (82)
Campbell expects to incur annual fixed costs of $254,800. The relative sales mix of the products is 60 percent for Super and 40 percent for Supreme.
To calculate the break-even point in units, first, we need to calculate the weighted average selling price and weighted average variable cost:
weighted average selling price= 0.60*108 + 0.40*131= $117.2
weighted average variable cost= 0.60*59 + 0.40*82= $68.2
Now, we can calculate the break-even point:
break-even point (units)= fixed expense/ (weighted average selling price - weighted average variable cost)
break-even point (units)= 254,800/ (117.2 - 68.2)= 5,200 units
To calculate the number of each product we need to multiply the total break-even point for the participation of the sales:
Super= 5,200*0.6= 3,120 units
Supreme= 5,200*0.40= 2,080units
