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  • Jul 30, 2010, 11:00 AM
    butterfly50
    I need help with an accounting problem
    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?
  • Jul 31, 2010, 12:28 AM
    rehmanvohra

    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

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