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weighted average contribution margin
Subject
Business Finance
Question Description
Hi-Tech Incorporated produces two different products with the following monthly data:
Cell
GPS
Total
Selling price per unit
100
400
Variable cost per unit
40
240
Expected unit sales
21,000
9,000
30,000
Sales mix
70%
30%
100%
Fixed costs
$ 1,800,000
Assume the sales mix remains the same at all levels of sales.
Required:
a. Calculate the weighted average contribution margin per unit.
b. How many units in total must be sold to break even?
c. How many units of each product must be sold to break even?
d. How many units in total must be sold to earn a monthly profit of $180,000?
e. How many units of each product must be sold to earn a monthly profit of $180,000?
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