Question

Multiple Choice Question 131 Sheridan's sells two products, a pepper relish with a selling price of $5.65 and a variable cost per jar of $2.40 and a blackberry marmalade with a selling price of $5.65 and a variable cost per jar of $2.30. Sheridan's expected sales are 1140 jars of pepper relish and 1710 jars of blackberry marmalade. Fixed expenses are $9706. How many jars of blackberry marmalade will Sheridan's need to sell to break-even? 1055 2850 1759 880 Click if you would like to Show Work for this question: Open Show Work

Answer 1

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Answer The correct answer is 1759 2 4 Explanation 5 Firstly we have to calculate the weighted average contrbituon Statement of Weighted Average Contribution 6 Blackberry Pepper Relish 7 Particulars Marmalade 8 Selling Price 5.65 5.65 9 Variable Cost 2.4 2.3 10 Contribution Margin 3.25 3.35 11 Sales Mix 0.4 0.6 12 Weeighted Average Contributio 13 Total Weighted Average Contribution 1.3+2.01 14 $3.31 1.3 2.01 16 Total Breakeven Units Fixed cost/weighted average contribution margin 179706/3.31 18 2932 Units 19 20 Break even units of Blackberry Marmalade Total Break even units* sales Mix of blackberry marmalade 21 2932 units 0.6 22 1759 Units 23 24 Thus the correct answer is 1759 Units ןב