ACCA PM · Chapter 5 · Question 2 of 10
Kappa Co sells two products in the constant unit ratio of 3 units of A to 2 units of B. Product A sells for $20 with variable cost of $12 per unit. Product B sells for $30 with variable cost of $15 per unit. Fixed costs are $186,000 per period. What is the breakeven sales revenue (to the nearest $)?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) $413,333
Explanation
Weighted average C/S ratio = $54 / $120 = 0.45. Breakeven revenue = fixed costs / C/S ratio = $186,000 / 0.45 = $413,333 (rounded).
More Cost-volume-profit analysis MCQs
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- Q6A company prepares a multi-product profit-volume chart that plots each product individually. In what order should the products be plotted?
- Q7Which of the following is an assumption underlying multi-product cost-volume-profit analysis?
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