Shotz Corporation sells three products: J, K, and L. The following information w

Question

Shotz Corporation sells three products: J, K, and L. The following information was taken from a recent budget: Unit sales Selling price Variable cost 192,000 74 56 64,000 101 62 64,000 $84 52 Total fixed costs are anticipated to be $2,950,000 Required: A. Determine Shotz's sales mix. B. Determine the weighted-average contribution margin. (Round your answer to 2 decimal places.) C. Calculate the number of units of J, K, and L that must be sold to break even. A. Sales mix: B. Weighted-average CM C. Break-even volume units units units

Explanation / Answer

a Sales mix: J 20% =64000/(64000+192000+64000) K 60% =192000/(64000+192000+64000) L 20% =64000/(64000+192000+64000) b Weighted-average CM=(84-52)*20%+(74-56)*60%+(101-62)*20%= $25 c Overall break even=2950000/25= 118000 J 23600 =118000*20% K 70800 =118000*60% L 23600 =118000*20%

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