Question

Show All Your Works For Your Response: Calculate Sales mix in units and Calculate Contribution margin Peppy Quadcopters plans to sell a standard quadcopter (toy drone) for $70 and a deluxe quadcopter for $100. Peppy purchases the standard quadcopter for $50 and the deluxe quadcopter for $80. Management expects to sell two deluxe quadcopters for every three standard quadcopters. The company's monthly fixed expenses are $22,000. How many of each type of quadcopter must Peppy sell monthly to breakeven? To earn $14,000? First identify the formula to compute the sales in units at various levels of operating income using the contribution margin approach. (Abbreviations used: Avg. = average, and CM = contribution margin.) Fixed expenses + Operating income ) Weighed-avg. CM per unit = Breakeven sales in units Next compute the weighted average contribution margin per unit. First identify the formula labels, then complete the calculations step by step. Sale price per unit Deduct Variable expense per unit Contribution margin per unit Sales mix in units Standard $ 70 (50) § 20 Contribution margin Weighted average contribution margin per unit

Answer 1

	Standard	Delux	Total
Sales Price per unit	$          70	$ 100
Deduct; Variable cost per unit	$        (50)	$ (80)
Contribution margin per unit	$          20	$    20
Sales in Units	3	2	5
Contribution Margin per unit	$          60	$    40	$ 100
Weighted Contribution	=720/5		$    20
Total Units sold for profit of $14000		=	Total Fixed cost+Profit			=	(22000+14000)	=	1800	Units
			Weighted CM per unit				$                             20
Standard Units to be sold	1800	x	3	=	1080
			5
Delux Units to be sold	1800	x	2	=	720
			5