Question:
Calculate the number of units of each product at break-even point.
Calculate the number of units of each product at break-even point.
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To verify your calculations, make sure the sum of the individual product units equals the total composite break-even units:
$$\text{Total Units} = 680 \text{ (Chocolate)} + 1,020 \text{ (Vanilla)} = 1,700 \text{ units}$$
This quick check ensures your sales mix allocation is mathematically correct.
Updated On: Jun 18, 2026
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Solution and Explanation
Step 1: Recalling the Composite Break-Even Point:
From the calculations in subpart (a), the total break-even point is 1,700 composite units.
Step 2: Formulating individual Product break-even volumes:
To find the required sales volume for each individual product at the break-even point, we multiply the total composite units by each product's sales mix percentage: Units of Product_i = Composite BEP Units \times Sales Mix Percentage_i
Step 3: Calculating Chocolate Cake break-even units:
Multiply the total units by the Chocolate Cake sales mix (40%): Required Units of Chocolate Cake &= 1,700 \times 40%
Required Units of Chocolate Cake &= 1,700 \times 0.40
Required Units of Chocolate Cake &= 680 units
Step 4: Calculating Vanilla Cake break-even units:
Multiply the total units by the Vanilla Cake sales mix (60%): Required Units of Vanilla Cake &= 1,700 \times 60%
Required Units of Vanilla Cake &= 1,700 \times 0.60
Required Units of Vanilla Cake &= 1,020 units Therefore, to break even, the company must sell 680 units of Chocolate Cake and 1,020 units of Vanilla Cake.
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