Question

Use the following information for the next TWO questions. The following data relate to Winger Company's...

Use the following information for the next TWO questions.

The following data relate to Winger Company's two products:

PRODUCT A PRODUCT B
Sales $240,000 $160,000
Contribution Margin Ratio 50% 30%

Fixed expenses for the company as a whole were $100,000.

A. What would the overall breakeven point for the company be?

B. At the break even point, Product A sales would be:

BE SURE TO PLEASE INCLUDE ALL WORK!

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Answer #1
  • Requirements

A

Total Fixed Cost

$100,000

B

Weighted Average CM Ratio

42%

[See working]

C = A/B

Overall Break even point for company

$238,095

Answer [A]

D = C x 60%

Product A Sales would be

$142,857

Answer [b]

  • Working

Product A

Product B

Total

A

Sales

$240,000

$160,000

$400,000

B

% of total sales

60%

40%

100%

C

CM Ratio

50%

30%

D = B x C

Weighted Average CM Ratio

30%

12%

42%

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