Mountain Springs produces and sells water filtration systems for homeowners. Information regarding its three models is shown

Question:

Mountain Springs produces and sells water filtration systems for homeowners. Information regarding its three models is shown below.

The company's total fixed costs to produce the filtration systems are $140,000.
(a) Determine the sales mix as a function of units sold for the three products.
(b) Determine the weighted-average unit contribution margin.
(c) Determine the total number of units that the company must produce to break even.
(d) Determine the number of units of each model that the company must produce to breakeven.

Contribution Margin
Contribution margin is an important element of cost volume profit analysis that managers carry out to assess the maximum number of units that are required to be at the breakeven point. Contribution margin is the profit before fixed cost and taxes...