WileyPlus Problem 3-5 The Zager Company produces two types of food processors. I

Question

WileyPlus Problem 3-5 The Zager Company produces two types of food processors. Information about the two products for 2012 is as follows: Selling price per unit Variable costs per unit Contribution margin per unit Regular Deluxe 78 $110 53 $57 47 $31 The company expects fixed costs to be $158,000 in 2012, The firm expects 60% of its sales (in units) to be Regular model food processors Your answer has been saved and sent for grading. See Gradebook for score details Determine the break-even point in units Break-even point 3816 units Determine sales in units of Regular and Deluxe models necessary to generate a before-tax profit of $94,000 Sales in units Regular Deluxe

Explanation / Answer

a Weighted average contribution margin=(31*60%)+(57*40%)= $41.4 Break-even point = 158000/41.4= 3816 units b Total units = (158000+94000)/41.4= 6087 Regular 3652 =6087*60% Deluxe 2435 =6087*40%

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