A Firm Sells Two Different Products, a AndB Required:
(A) Calculate the Contribution Margin Per Composite Unit

question 57

Essay

A firm sells two different products, A andB. For each unit of B, the firm sells two units of A. Total fixed costs for this firm are $1,260,000. Additional selling prices and cost information for both products follow: $\begin{array}{rrr}& \text { Selling } & \text { Variable } \\\text { Product } & \text { Price per unit } & \text { Costs per unit}\\\mathrm{A} & \$ 72 & \$ 40 \\\mathrm{~B} & 48 & 28\end{array}$
Required:
(a) Calculate the contribution margin per composite unit.
(b) Calculate the break-even point in units of each individual product.
(c) If pretax income before taxes of $294,000 is desired, how many units of A and B must be sold?

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Definitions:

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The state of being aware of and able to think about one's own thoughts, feelings, and perceptions in the moment.

Stimulant

A substance that raises levels of physiological or nervous activity in the body.

Mental Activity

Processes of the mind that include thinking, perceiving, remembering, reasoning, and any other form of cerebral operation.

Physical Activity

Any movement of the body that requires energy expenditure, contributing to improving or maintaining physical fitness.