SJ Candles manufactures paraffin and soy candles.

We are given the following data:

Selling price per Paraffin candle: $7.00

Variable cost per Paraffin candle: $2.00

Contribution margin per Paraffin = $7 - $2 = $5

Selling price per Soy candle: $18.00

Variable cost per Soy candle: $8.00

Contribution margin per Soy = $18 - $8 = $10

Sales mix: 80% Paraffin, 20% Soy

Fixed costs = $120,000

To determine the weighted-average contribution margin per unit:

= (0.80 × $5) + (0.20 × $10)

= $4.00 + $2.00 = $6.00

Break-even units = Fixed Costs ÷ Weighted Avg. CM per Unit

= $120,000 ÷ $6.00 = 20,000 candles