CIMA BA2 · Chapter 10 · Question 6 of 12
A company sells two products, P and Q, in the constant ratio 3 units of P to 2 units of Q. Contribution is $6 per unit of P and $10 per unit of Q. Fixed costs are $190,000. How many units of Q must be sold to break even?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) 10,000 units
Explanation
Contribution per 'mix' of 3 P and 2 Q = (3 x $6) + (2 x $10) = $38. Breakeven number of mixes = $190,000 / $38 = 5,000. Units of Q = 5,000 x 2 = 10,000 (with 15,000 units of P).
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