Answer (B) is correct . The breakeven point equals fixed costs divided by unit contribution margin. The composite unit contribution margin for A and B is $7 {[3 units of A × ($5 – $3)] + [1 unit of B × ($6 – $5)]}. Thus, 40,000 composite units ($280,000 ÷ $7), including 40,000 units of B, are sold at the breakeven point. Hence, sales of B at the breakeven point equal $240,000 (40,000 units × $6).
Answer (A) is incorrect because Applying product A’s price results in $200,000 (40,000 × $5).
Answer (C) is incorrect because Fixed costs equal $280,000.
Answer (D) is incorrect because Product A sales and product B sales at the breakeven point equals $840,000.
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Assume three units of A are sold for each unit of B sold. How much will sales be in dollars of product B at the breakeven point?
