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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? |
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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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