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View Full Version : I need help with an accounting problem


butterfly50
Jul 30, 2010, 11:00 AM
Multiproduct, Contribution Margin National Tennis Racquet Co. produces and sells three models.
Smasher Basher Dinker Total
Units sold 1,000 2,000 2,000 5,000
Sales $100,000 $120,000 $80,000 $300,000
Less variable costs 50,000 48,000 24,000 122,000
Contribution margin 50,000 72,000 56,000 178,000
Less common fixed costs 103,000
Profit $75,000

A. What is the weighted average contribution margin per unit?
B. Calculate the break-even point in units assuming the current mix.
C. What would be the number of Smashers, Bashers, and Dinkers in the break-even level of sales?
Can you help me?

rehmanvohra
Jul 31, 2010, 12:28 AM
Yes, I can help you, but I will not solve it for you. Instead, I will guide you as to how to go about it.

A. Total contribution/total units sold
B. Fixed costs/contribution per unit
C. Use the break even sales from B and allocate in the sales mix ratio.

This might help. If you are stuck, show me how you have done it