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Chartz 1-2-3 is a top selling electronic spread sheet product. Chartz is about to release version 5.0. It divides its custome
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Answer #1

1.Sale mix 60:40

Contribution margin of new customers = 60% x $130 = $78

Contribution margin of upgrade customers = 40% x $80 = $32

Total contribution margin per unit = $78 + $32 = $110

Breakeven units = Fixed cost / Contribution margin per unit. = $16,500,000 / $110 = 150,000 units

Question 2 New Customer Per unit Amount Upgarde Customer Per unit Amount Units Total Particulars Sales units Calculation Unit

3.a.Sale mix 40:60

Contribution margin of new customers = 40% x $130 = $52

Contribution margin of upgrade customers = 60% x $80 = $48

Total contribution margin per unit = $52 + $48 = $100

Breakeven units = Fixed cost / Contribution margin per unit. = $16,500,000 / $100 = 165,000 units

3.b.Sale mix 80:20

Contribution margin of new customers = 80% x $130 = $104

Contribution margin of upgrade customers = 20% x $80 = $16

Total contribution margin per unit = $104 + $16 = $120

Breakeven units = Fixed cost / Contribution margin per unit. = $16,500,000 / $120 = 137,500 units

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