Description
- This is your third Comprehensive Problem covering CVP Analysis. This problem covers Cost Behavior and Cost Analysis for companies that sell a sing product and then multiple products. Therefore, you will need to be familiar with the Break-even point formulas for a single product and multiple products. Remember, when more then one product is sold the break-even formula uses the weighted average contribution margin per unit.
- Please refer to the additional study material provided for Chapter 21 to assist you completing the assignment. In addition, make sure to watch the comprehensive problem III overview video for helpful hints on completing the assignment. Please Note that once the assignment is submitted it cannot be taken back and corrected.
- If you have questions about your work please email the work in progress for questions rather than submitting through this area. Make sure to show all work and submit as an excel or word document.
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Explanation & Answer
Attached.
PART II.
1. weighted average contribution margin per unit.
=(Unit contribution margin*sale mix)+(unit contribution margin*sales mix)
={($44-$24)*06)+{($100-$30)*4}
=$12+$28
=$40
2. breakeven point in units for the “package” of products.
=fixed cost/contribution margin.
=$40,000/$40
=1,000 units.
3. Units of each product line the company must sell in order to breakeven.
Cat beds=1000*60%
=600.
4. sales dollars required of each pr...