Handy Home sells windows (80% of sales) and doors (20% of sales). The selling price of each window is $210 and of each door is $520. The variable cost of each window is $130 and of each door is $360. Fixed costs are $480,000.

(1) Compute the weighted average contribution margin.

Sales mix

Contribution margin

Total per unit

Windows

Doors

20%

80%

Weighted average contribution margin

Il

(2) Compute the break-even point in units using the weighted average contribution margin.

Numerator:

Denominator:

Total fixed costs

Weighted-average contribution margin per unit

$

480,000

/

11

Break Even Units

Break Even Units

0

1

Unit sales at

break-even point

(3) Compute the number of units of each product that will be sold at the break-even point.

Sales mix

Number of units to break even

Windows

Doors

Total