01. The Beta company has three product lines of belts: X, Y and Z with contribution margins of Rs.15 Rs.

10
and Rs.5 respectively. The president foresees sales of 100,000 units in the coming period, consisting of
10,000 units of X, 50,000 units of Y and 40,000 units of Z. The company’s fixed costs for the period are
Rs. 510,000.
What is the company’s breakeven point in units assuming that the given sales mixed is maintained?

Answer:
Sales of X, Y and Z are in the ratio 10,000: 50,000:40,000. So, for every 1 unit of X,5 units of Y are sold, and
4 units of Z are sold.
Let Q = Number of units of X to breakeven
5Q = Number of units of Y to breakeven
4Q = Number of units of Z to breakeven
Total contribution fixed costs = Zero operating income
Rs.15xQ + Rs.10(5Q) + Rs. 5(4Q) – Rs. 510,000= 0
85Q- Rs.510,000=0
Q=510,000/85= 6,000 units
Q= 6,000 units of X
5Q=30,000 units of Y
4Q = 24,000 units of Z
Total 60,000 units
Total contribution and operating income Rs.
X= 10,000 x Rs.15 = 150,000
Y = 50,000 x Rs. 10 = 500,000
Z = 40,000 x Rs.5 = 200,000
Total contribution 850,000
Fixed costs 510,000
Operating income 340,000