Presented is information for Stafford Company's three products.
With monthly fixed costs of $112,500, the company sells two units of A for each unit of B and three units of B for each unit of C.
Required
Determine the unit sales of product A at the monthly break-even point.

Computation of Sales Mix: A:B:C = 6:3:1

Computation of Break Even Point:

BEP = Fixed Cost/(Weighted Average commitment Margin)

Weighted Average Contribution Margin = Weighted Average Selling Price - Weighted Average Variable Cost

Weighted Average Selling Price = (Selling Price of A x Proportion of A) + (Selling Price of B x Proportion of B) + (Selling Price of C x Proportion of C)

Weighted Average Selling Price = (7 x 0.60) + (9 x 0.30) + (7 x 0.10) = $7.60 per Unit

Weighted Average Variable Cost = (Variable Cost of A x Proportion of A) + (Variable Cost of B x Proportion of B) + (Variable Cost of C x Proportion of C)

Weighted Average Variable Cost = (4 x 0.60) + (5 x 0.30) + (1 x 0.10) = $4 per Unit

Earn back the original investment point = 306,000/(7.60 - 4)

Earn back the original investment Point = 306,000/3.60 = 85,000 Units

Units Sales of Product An at Break Even Point = 85,000 x 60% = 51,000 Units