## Answers

**Solution :- a. Calculation of break even point in unit sales for each product :-**

Particulars | Velcro | Metal | Nylon |

Selling Price per unit | $ 1.70 | $ 1.80 | $ 1.10 |

Less : Variable expense per unit | $ 0.80 | $ 1.10 | $ 0.90 |

Contribution per unit | $ 0.90 | $ 0.70 | $ 0.20 |

Fixed Expenses allocated to Velcro product = $ 19620

Fixed Expenses allocated to Metal product = $ 119700

Fixed Expenses allocated to Nylon product = $ 39000

Break even point (in unit sales) = Fixed expenses / Contribution per unit

Particulars | Velcro | Metal | Nylon |

Fixed expenses [A] | $ 19620 | $ 119700 | $ 39000 |

Contribution per unit [B] | $ 0.90 | $ 0.70 | $ 0.20 |

Break even point (in unit sales) [A/B] | 21800 Units | 171000 Units | 195000 Units |

**b. Calculation of overall profit of the company If the company sells exactly the break-even quantity of each product :-**

Particulars | Velcro | Metal | Nylon |

Contribution per unit [A] | $ 0.90 | $ 0.70 | $ 0.20 |

No. of units [B] | 21800 Units | 171000 Units | 195000 Units |

Total Contribution [A*B] | $ 19620 | $ 119700 | $ 39000 |

Total Contribution (All products) = $ 178320

Less : Total fixed expenses = $ 255000

Overall Profit = ($ 76680)

At break even point , total contribution = total fixed expenses ,therefore overall profit (loss) is equal to remaining fixed expenses ($ 76680) .Therefore , Overall loss for the company = $ 76680.

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