Native Wood Products Ltd sells hand-made coffee tables. The shop owner has divided sales into two categories according to the type of wood used in the tables, as follows:Product typeKahikateaRimuSales price$2,000$1,200Costs$1,200$520Sales commission$100$60Seventy percent (70%) of the shop's sales are rimu tables. The shop's annual fixed costs are $161,000.Calculate the weighted average contribution margin, assuming the sales mix stays the same.

Contribution margin is that portion of sales that is available to contribute to the fixed cost and…

Answered: Native Wood Products Ltd sells…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter10: Short-term Decision Making

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Native Wood Products Ltd sells hand-made coffee tables. The shop owner has divided sales into two categories according to the type of wood used in the tables, as follows:

Product type	Kahikatea	Rimu
Sales price	$2,000	$1,200
Costs	$1,200	$520
Sales commission	$100	$60

Seventy percent (70%) of the shop's sales are rimu tables. The shop's annual fixed costs are $161,000.

Calculate the weighted average contribution margin, assuming the sales mix stays the same.

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