1. Cats Unlimited sells two cat products: stuffed mice and rattle balls. They expect to sell the stuffed mice for $10 per unit with variable costs of $5 per unit, and sell rattle balls for $7 per unit with variable costs of $3 per unit. What is the weighted average unit contribution margin if the sales mix is 4 stuffed mice for 1 rattle ball?

2. Brysons Brewery has the following selected information:

	Sales Revenue	Contribution Margin Ratio
Root Beer	$700,000	30%
Butter Beer	$300,000	40%
Total	$1,000,000
Total Fixed Costs	$264,000

a) What is Brysons total break-even point in sales dollars? (round to the nearest dollar)

b) What is Brysons break-even point in sales dollars for each product line (Root Beer and Butter Beer)?

3. Sleep Corporation manufactures and sells three different types of mattresses. They are referred to as Good, Supreme, and Ultimate mattresses. Stuffing and fluffing time is limited. More time is required to stuff and fluff the pads used in the Supreme and Ultimate mattresses. Additional information is provided below.

		Good		Supreme		Ultimate
Selling price		$80.00		$305		$999.00
Variable costs and expenses		46.80		194.60		475.00
Contribution margin		$33.20		$110.40		$524.00
Stuffing and fluffing time required		0.4 hrs		1.2hrs		6 hrs

a) Ignoring the time constraint, what strategy would appear to be optimal? Why?

b) What is the contribution margin per unit of limited resource for each type of mattress?

c) If additional stuffing and fluffing time could be obtained, how should the additional capacity be used?

Additional capacity should be used to make ________________ mattresses.

4. Meyers & Sons has the following unit sales and cost data for their best-selling product. Note: The following situations in parts a and b are independent of each other.

Selling price per unit $600

Variable cost per unit $260

Fixed costs $429,600

Current units sold 2,800 units

Situation A: Meyers & Sons is anticipating a price increase from their suppliers for materials, and instead of raising the selling price of their product, they have purchased additional advertising in an effort to increase their sales. If variable costs increase 10% due to the increased material costs and fixed costs increase by $10,000 due to the additional advertising, what is the new amount of units that they need to sell to break-even?

Situation B: Meyers & Sons is considering purchasing additional advertising for $15,000 in an effort to be more competitive in the market. What is the change in Net Income the company can expect based on this change in fixed costs, and assuming they are able to increase their sales to 3,400 units sold?