Question

Una Corporation manufactures two products; data are shown below: Contribution Margin Ratio Relative Sales Mix Product...

Una Corporation manufactures two products; data are shown below:

Contribution Margin Ratio Relative Sales Mix
Product D 50% 40%
Product F 30% 60%

If Una's monthly fixed costs average $400,000, what is its break-even point expressed in sales dollars? (Round the answer to the nearest dollar.)

Multiple Choice

  • $1,320,462

  • $1,400,000

  • $1,250,000

  • $1,052,632

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Answer #1

Weighted average contribution margin ratio

= [0.50*0.40] + [0.30*0.60] = 0.38

Breakeven point = Fixed cost/WACM

= 400,000/0.38

= 1,052,632

OPTION D

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