Question

Chapter 6 Assignment i Saved Tiago makes three models of camera lens. Its product mix and contribution margin per unit follow: 10 Percentage of Unit Contribution Margin per sales unit 27% $41 33 points Lens A Lens B Lens C 36 37 46 eBook Required: 1. Determine the weighted average contribution margin per unit. 2. Determine the number of units of each product that Tiago must sell to break even if fixed costs are $192,000. 3. Determine how many units of each product must be sold to generate a profit of $78,000. Hint Complete this question by entering your answers in the tabs below. Print Required 1 Required 2 Required 3 References Determine the weighted average contribution margin per unit. (Round your intermediate calculations and final answer to 2 decimal places.) Weighted Average CM per unit < Required 1 Required 2 >

Answer 1

1. Weighted average contribution margin per unit = $41x27% + $33x36% + $46x37% = $39.97 per unit

2. Break Even Units = Fixed Cost / Weighted Average CM per unit
= $192000 / $39.97 = 4804 units
A = 4804 x 27% = 1297 units
B = 4804 x 36% = 1730 units
C = 4804 x 37% = 1777 units

3. Units to earn $78000 profit = (Fixed Cost+Target Profit) / Weighted Average CM per unit
= ($192000+78000) / $39.97 = 6756 units
A = 6756 x 27% = 1824 units
B = 6756 x 36% = 2432 units
C = 6756 x 37% = 2500 units