Homework Help is Here – Start Your Trial Now!
Business
Accounting
Smarty Inc. Ltd produces two different products with the following monthly data:     P1 P2 Total Selling price per unit $100 $12   Variable cost per unit $ 60 $ 3   Expected unit sales 21,000 14,000 35,000 Sales mix 60 percent 40 percent 100 percent Fixed costs     $750,000   Assume the sales mix remains the same at all levels of sales.   Required:  Calculate the weighted average contribution margin per unit.   How many units in total must be sold to break even?  How many units of each product must be sold to break even?

Smarty Inc. Ltd produces two different products with the following monthly data:     P1 P2 Total Selling price per unit $100 $12   Variable cost per unit $ 60 $ 3   Expected unit sales 21,000 14,000 35,000 Sales mix 60 percent 40 percent 100 percent Fixed costs     $750,000   Assume the sales mix remains the same at all levels of sales.   Required:  Calculate the weighted average contribution margin per unit.   How many units in total must be sold to break even?  How many units of each product must be sold to break even?

Managerial Accounting: The Cornerstone of Business Decision-Making
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter7: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 62P
See similar textbooks
icon
Related questions
Question

Smarty Inc. Ltd produces two different products with the following monthly data:

 

 

P1

P2

Total

Selling price per unit

$100

$12

 

Variable cost per unit

$ 60

$ 3

 

Expected unit sales

21,000

14,000

35,000

Sales mix

60 percent

40 percent

100 percent

Fixed costs

 

 

$750,000

 

Assume the sales mix remains the same at all levels of sales.

 

Required:

  1.  Calculate the weighted average contribution margin per unit. 
  2.  How many units in total must be sold to break even? 
  3. How many units of each product must be sold to break even? 
  4. How many units of each product must be sold to earn a monthly profit of $100,000? 
  5. Prepare a contribution margin income statement for the month. 
  6.  If the sales mix shifts more toward the P1 product than the P2 product, would the break-even point in units increase or decrease? Explain. 
Expert Solution
steps

Step by step

Solved in 3 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Managerial Accounting: The Cornerstone of Busines…
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning
Principles of Accounting Volume 2
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
Cornerstones of Cost Management (Cornerstones Ser…
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Managerial Accounting
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Survey of Accounting (Accounting I)
Survey of Accounting (Accounting I)
Accounting
ISBN:
9781305961883
Author:
Carl Warren
Publisher:
Cengage Learning
Principles of Cost Accounting
Principles of Cost Accounting
Accounting
ISBN:
9781305087408
Author:
Edward J. Vanderbeck, Maria R. Mitchell
Publisher:
Cengage Learning
SEE MORE TEXTBOOKS