Peine Candle Supply makes candles. The sales mix (as a percentage of total dollar sales) of its three product lines is birthday candles 30%, standard tapered candles 50%, and large scented candles 20%. The contribution margin ratio of each candle type is shown below.

Candle Type Contribution Margin Ratio Birthday 20%

Standard tapered 20%

Large scented 45%

(a) What is the weighted-average contribution margin ratio?

(b) If the company’s fixed costs are $440,000 per year, what is the dollar amount of each type of candle that must be sold to break even?

AppendixLO1