Question

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 23 % $ 38 Lens B 36 30 Lens C 41 43 Required:

1. Determine the weighted-average contribution margin per unit. (Round your intermediate calculations and final answer to 2 decimal places.)

2. Determine the number of units of each product that Tiago must sell to break even if fixed costs are $181,000. (Round intermediate calculations and final answers to the nearest whole number.)

3. Determine how many units of each product must be sold to generate a profit of $80,000. (Round intermediate calculations and final answers to the nearest whole number.)

Answer #1

1) | Weighted average contribution = 38*23%+30*36%+43*41% = | $ 37.17 | |

2) | Number of units of the combined product for break even = Fixed costs/Weighted average CM = 181000/37.17 | 4870 | Units |

Break up: | |||

Lens A = 4870*23% = | 1120 | Units | |

Lens B = 4870*36% = | 1753 | Units | |

Lens A = 4870*41% = | 1997 | Units | |

Total | 4870 | Units | |

3) | Number of units of the combined product for profit of $80000 = (Fixed costs+Desired proti)/Weighted average CM = (181000+80000)/37.17 = | 7022 | Units |

Break up: | |||

Lens A = 7022*23% = | 1615 | Units | |

Lens B = 7022*36% = | 2528 | Units | |

Lens A = 7022*41% = | 2879 | Units | |

Total | 7022 | Units |

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Percentage of Unit sales
Contribution Margin per unit
Lens A
23
%
$
41
Lens B
39
33
Lens C
38
46
Required:
1. Determine the 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
$181,000.
3. Determine how many units of each product
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