ACCA PM · Chapter 5 · Question 3 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. How many units of product B must be sold to break even (to the nearest unit)?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) 6,889 units
Explanation
Contribution per batch (3A + 2B) = $54. Breakeven batches = $186,000 / $54 = 3444.44. Units of B = 3444.44 x 2 = 6,889 units (rounded). Units of A would be 10,333.
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