Jamal & Co. makes and sells two types of shoes, Plain and Fancy. Data concerning
ID: 2399052 • Letter: J
Question
Jamal & Co. makes and sells two types of shoes, Plain and Fancy. Data concerning these products are as follows: Plain Fancy Unit selling price $23.00 $30.00 Variable cost per unit 11.00 25.00 Sixty percent of the unit sales are Plain, and annual fixed expenses are $55,200. The weighted-average unit contribution margin is:
1. The weighted-average unit contribution margin is (Round intermediate calculations and final answer to 2 decimal places):
a. $5.00
b. an amount other than those above.
c. $17.20
d. $9.45.
e. $9.20.
2. Required information Assuming that the sales mix remains constant, the total number of units that Jamal must sell to break even is (Round intermediate calculations to 2 decimal places and final answer to nearest whole number):
a. 3,432
b. 3,647
c. 5,737
d. an amount other than those above
e. 6,000
Explanation / Answer
1.Weighted Contribution margin=Respective Contribution margin*Respective weights
=(12*0.6)+($5*0.4)(Weight of Fancy=(100-60)=40%)
=$9.20
2.Total units to be sold=Fixed expenses/Weighted Contribution margin
=(55200/9.2)
=6000 units.
Plain Fancy Sales $23 $30 Less:Variable expense $11 $25 Contribution margin $12 $5Related Questions
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