Question

Tiago makes three models of camera lens. Its product mix and contribution margin per unit follow:...

Tiago makes three models of camera lens. Its product mix and contribution margin per unit follow:

Percentage of Unit sales Contribution Margin per unit
Lens A 25 % $ 38
Lens B 40 30
Lens C 35 43

Suppose the product mix has shifted to 40/30/30.

Required:

1. Determine the new weighted-average contribution margin per unit.

2. Determine the number of units of each product that Tiago must sell to break even if fixed costs are $187,000.

3. Determine how many units of each product must be sold to generate a profit of $73,000.

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