Business Solutions sells upscale modular desk units and office chairs in the ratio of 4:2 (desk unit:chair). The selling prices are $1,220 per desk unit and $470 per chair. The variable costs are $720 per desk unit and $220 per chair. Fixed costs are $312,500. Required: 1. Compute the selling price per composite unit (Omit the S sign in your response.) Selling price $ 5820 2. Compute the variable costs per composite unit- (Omit the $ sign in your response.) Variable costs $ 3. Compute the break-even point in composite units. Break-even point composite units 4. Compute the number of units of each product that would be sold at the break-even point. Desk Chairs Unit sales units units I have completed #'s 1 & 2, but I need help with the break-even point! I need Questions 3 & 4!

Selling price: $5,820

Variable cost: $3,320

BEP= 125 units (500 desks and 250 chairs)

Step-by-step explanation:

We need to calculate the break even point.

In this case, we have composite unit made by two products wich have a ratio of 4:2. Thar means 4 desks and 2 chairs per unit.

The selling price of this composite unit is:

The variable cost of the composite unit is:

To calculate the break even point, the unit will be the composite one  (4 desks and 2 chairs).

We know the fixed costs ($312,500) and the selling price and variable costs of each composite unit, so we are ready to calculate the BEP.

The BEP formula states that

That means that the quantity needed to sell to start to have profits is 125 composite units.

That means 500 desks (125*4=500) and 250 chairs (125*2=250).

step-by-step explanation:

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