Hi,

1. How do you compute the break even point for the firm as a whole using weighted average contribution margin and what is the individual break even point for each product?
   

Exhibit 2 Product Class Cost Analysis (Normal Year) Aggregate Sales at full capacity (units) 2,000,000 Actual sales volume (units) 1,500,000 Unit sales price ($) 1.20 Total sales revenue ($) 1,800,000 Variable cost per unit ($) 0.75 Total variable cost ($) 1,125,000 Fixed costs ($) 520,000 Net profit ($) 155,000 Ratios Variable cost to sales .63 Variable income to sales 37 Utilization of capacity (%) 75.0 A 600,000 1 .67 1 ,000,000 1 .25 750,000 170,000 80,000 .75 .25 30.0 Product Lines B 400,000 1.50 600,000 0.625 250,000 275,000 75,000 .42 .58 20.0 500,000 0.40 200,000 0.25 125,000 75,000 0 .63 .37 25.0