Question

Chapter 6 Assignment i Saved Juniper Corp. makes three models of insulated thermos. Juniper has $300,000 in total revenue and total variable costs of $162,000. Its sales mix is given below: 10 points Percentage of total sales 32% 50 Thermos A Thermos B Thermosc 18 eBook Required: 1. Calculate the (overall) weighted average contribution margin ratio. 2. Determine the total sales revenue Juniper needs to break even if fixed costs are $89,470. 3. Determine the total sales revenue needed to generate a profit of $103,500. 4. Determine the sales revenue from each product needed to generate a profit of $103,500. Hint Print Complete this question by entering your answers in the tabs below. References Required 1 Required 2 Required 3 Required 4 Calculate the overall) weighted average contribution margin ratio. Weighted Average CM Ratio ]% Required 1 Required 2 >

Answer 1

1) Contribution margin= Total revenue-Total variable costs

= $300000-162000= $138000

Weighted average contribution margin ratio= Contribution margin*100/Sales

= $138000*100/300000= 46%

2) Break even= Fixed cost/Weighted average contribution margin ratio

= $89470/46%= $194500

3) Total sales revenue= (Fixed cost+Target profit)/Weighted average contribution margin ratio

= ($89470+103500)/46%= $419500

4)

	Total sales revenue	Percent	Sales revenue for each product
Thermos A	$419500	32%	($419500*32%)= $134240
Thermos B	$419500	50%	($419500*50%)= 209750
Thermos C	$419500	18%	($419500*18%)= 75510
			$419500