Question

MC Qu. 142 Madison Corporation sells three products...

Madison Corporation sells three products (M, N, and O) in the following mix: 3:1:2. Unit price and cost data are:

	M			N			O
Unit sales price	$	9		$	5		$	8
Unit variable costs		3			2			6

Total fixed costs are $375,000. The selling price per composite unit for the current sales mix (rounded to the nearest cent) is:

Multiple Choice

$22.00.

$ 7.33.

$26.00.

$48.00.

$32.00.

Answer 1

Answer:

Madison Corporation sells three products (M, N, and O) in the following mix are in the ratio 3:1:2.

Now we have to determine the selling price per composite unit for the current sales mix is,

Units of data	Calculations	Amount ($)
3 units of M at 9 each	3*9	27.00
1 unit of N at 5 each	1*5	5.00
2 units of O at 8 each	2*8	16.00
Selling price of composite unit	27+5+16	48.00

Therefore the selling price per composite unit for the current sales mix is $48.00. Option-d is correct answer.