Adams Company manufactures two products. The budgeted per-unit contribution margin for each product follows: Super Supreme Sales price $ 95 $ 124 Variable cost per unit (58 ) (74 ) Contribution margin per unit $ 37 $ 50 Adams expects to incur annual fixed costs of $227,880. The relative sales mix of the products is 60 percent for Super and 40 percent for Supreme. Required Determine the total number of products (units of Super and Supreme combined) Adams must sell to break even. How many units each of Super and Supreme must Adams sell to break even

Expected contribution as per sales mix = $37*0.60 + $50*0.40

= $22.20 + $20

= $42.20 per unit

Total number of products in total at break even point = Total fixed cost / Contribution per unit

= $227,880 / $42.20 per unit

= 5,400 units

How many units each of Super and Supreme must Adams sell to break even?

According to sales mix:

Super = 5,400 * 60% = 3,240 units

Supreme = 5,400 * 40% = 2,160 units.

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whole quiz

1. the sum of all activities involved in getting high-quality products into the marketplace

2.operations

3. the principle of looking at the supply chain as a whole in order to improve the overall flow through the system.

4. produced; performed

5. activities producing tangible products, such as radios, newspapers, buses, and textbooks.

6. activities producing intangible and tangible products, such as entertainment, transportation, and education.

7.   customer focus

8. analyzing a competitor's products to identify desirable improvements

9. the systematic direction and control of the processes that transform resources into finished projects that create value for and provide benefits to consumers.

10. operation management.

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