ICAEW BIP · Chapter 11 · Question 5 of 10
A company sells products X and Y in the fixed ratio 3:2 by units. Product X earns a contribution of £10 per unit and product Y earns £15 per unit. Fixed costs are £180,000. How many units of product Y must be sold to break even?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) 6,000 units
Explanation
Contribution from one 'batch' of 3 X and 2 Y = (3 x £10) + (2 x £15) = £60. Breakeven batches = £180,000 / £60 = 3,000. Units of Y = 3,000 x 2 = 6,000 (with 9,000 units of X, 15,000 units in total).
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