document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=1173641>Question 1173641</A>: <I><SPAN STYLE=\"word-break: break-all;\"> A Leading manufacturer of Action Figures is about to introduce four new Action Figures. The<BR>\n" );
document.write( "accompanying table summarizes price and cost data, combined fixed costs equal $85,000. A<BR>\n" );
document.write( "marketing research study predicts that for each unit sold of Noyan, 2 units of Dogan, 3 units of<BR>\n" );
document.write( "Bamsi and 4 units of Turgut will be sold.\r<BR>\n" );
document.write( "\n" );
document.write( "                                     Action Figures<BR>\n" );
document.write( "                           Turgut       Bamsi    Dogan     Noyan<BR>\n" );
document.write( "Selling Price (in dollars)   35          26        24       16<BR>\n" );
document.write( "Variable Cost/unit(in $)     17          12        12       11\r<BR>\n" );
document.write( "\n" );
document.write( "a) How many product mix units must be sold to break even?<BR>\n" );
document.write( "b) How does it translate into sales of individual games?<BR>\n" );
document.write( " </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #850725 by </B><A HREF=/tutors/aboutme.mpl?userid=CPhill><B>CPhill(1987)</B></A><img src=\"/images/stars/stars-12.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=CPhill><IMG SRC=http://www.algebra.com/images/aboutme-small.gif BORDER=0 alt=\"About Me\" VALIGN=MIDDLE></A>&nbsp;<IMG SRC=http://www.algebra.com/cgi-bin/show-face.mpl?user=CPhill><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=850725\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> Let's break down this problem step-by-step to determine the breakeven point and the individual sales of each action figure.\r<BR>\n" );
document.write( "\n" );
document.write( "**1. Calculate the Contribution Margin per Unit for Each Action Figure:**\r<BR>\n" );
document.write( "\n" );
document.write( "* **Turgut:** $35 (Selling Price) - $17 (Variable Cost) = $18<BR>\n" );
document.write( "* **Bamsi:** $26 (Selling Price) - $12 (Variable Cost) = $14<BR>\n" );
document.write( "* **Dogan:** $24 (Selling Price) - $12 (Variable Cost) = $12<BR>\n" );
document.write( "* **Noyan:** $16 (Selling Price) - $11 (Variable Cost) = $5\r<BR>\n" );
document.write( "\n" );
document.write( "**2. Determine the Sales Mix Ratio:**\r<BR>\n" );
document.write( "\n" );
document.write( "* The marketing research predicts the sales mix as follows:<BR>\n" );
document.write( "    * Noyan: 1 unit<BR>\n" );
document.write( "    * Dogan: 2 units<BR>\n" );
document.write( "    * Bamsi: 3 units<BR>\n" );
document.write( "    * Turgut: 4 units\r<BR>\n" );
document.write( "\n" );
document.write( "**3. Calculate the Weighted Average Contribution Margin:**\r<BR>\n" );
document.write( "\n" );
document.write( "* Multiply each product's contribution margin by its sales mix ratio and sum the results:<BR>\n" );
document.write( "    * (Noyan: $5 * 1) + (Dogan: $12 * 2) + (Bamsi: $14 * 3) + (Turgut: $18 * 4) = $5 + $24 + $42 + $72 = $143\r<BR>\n" );
document.write( "\n" );
document.write( "* Divide the weighted average contribution margin by the total units in the sales mix:<BR>\n" );
document.write( "    * 1 + 2 + 3 + 4 = 10 units in the mix.<BR>\n" );
document.write( "    * Weighted Average Contribution Margin= $143 / 10 = $14.3 per sales mix unit\r<BR>\n" );
document.write( "\n" );
document.write( "**4. Calculate the Breakeven Point in Sales Mix Units:**\r<BR>\n" );
document.write( "\n" );
document.write( "* Divide the fixed costs by the weighted average contribution margin:<BR>\n" );
document.write( "    * Breakeven Point (Sales Mix Units) = $85,000 / $14.3 = 5944.06 (approximately 5944 sales mix units)\r<BR>\n" );
document.write( "\n" );
document.write( "**a) How many product mix units must be sold to break even?**\r<BR>\n" );
document.write( "\n" );
document.write( "* Therefore, approximately 5944 sales mix units must be sold to break even.\r<BR>\n" );
document.write( "\n" );
document.write( "**b) How does it translate into sales of individual games?**\r<BR>\n" );
document.write( "\n" );
document.write( "* Multiply the breakeven point in sales mix units by the sales mix ratio for each action figure:<BR>\n" );
document.write( "    * Noyan: 5944 * 1 = 5944 units<BR>\n" );
document.write( "    * Dogan: 5944 * 2 = 11888 units<BR>\n" );
document.write( "    * Bamsi: 5944 * 3 = 17832 units<BR>\n" );
document.write( "    * Turgut: 5944 * 4 = 23776 units\r<BR>\n" );
document.write( "\n" );
document.write( "**Summary:**\r<BR>\n" );
document.write( "\n" );
document.write( "* **a) Breakeven Point (Sales Mix Units):** 5944 units<BR>\n" );
document.write( "* **b) Individual Action Figure Sales:**<BR>\n" );
document.write( "    * Noyan: 5944 units<BR>\n" );
document.write( "    * Dogan: 11888 units<BR>\n" );
document.write( "    * Bamsi: 17832 units<BR>\n" );
document.write( "    * Turgut: 23776 units<BR>\n" );
document.write( " </SPAN>\n" );
document.write( "</TD></TR></TABLE>\n" );