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US-Mobile manufactures and sells two products, tablet computers and smartphones, in the ratio of 5:3. Fixed costs are $105,000, and the contribution margin per composite unit is $125. What number of each type of product is sold at the break-even point

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Kolawole845

Answer:

Tablets  = 525 units

Smartphones  = 315 units

Explanation:

The break-even point (BEP) is the quantity  of each  product to be sold such that the business makes no profit or loss.

The beak-even point can be determined as follows:

Break-even point = total fixed cost / average contribution per unit

Break-even point (units ) = $105,000/125 per unit

= 840 units

The 840 should be sold in the proportion stated below:

Tablets = 5/(5+3)× 840 =525 units

Smartphones = 3/(5+3) × 840 = 315 units