Detailed Answer
(b) The requirement is to determine how many units of
product X (one of three products) Thomas would sell at the
breakeven point. The solutions approach is first to find the number
of composite units to breakeven; a composite unit consists of
the number of units of each of the three products in the mix.
Since Thomas sells three units of X for each unit of Z and two
units of Y for each unit of X, they are selling six units of Y for each
unit of Z; therefore, a composite unit consists of 3X, 6Y, and 1Z.
The total contribution margin for one composite unit is
X (3) ($1.00) = $ 3
Y (6) ($1.50) = $ 9
Z (1) ($3.00) = $ 3
$15
The breakeven point in terms of units of the product mix group is
$600,000 ??$15 = 40,000 composite units
Since there are three units of X in each composite unit, (40,000)
(3) or 120,000 units of X are sold at breakeven.