1 Question One Fiesta Ponchos sells a variety of festive garments. Information about the average selling price per unit, the average unit production cost, and the company's expected fixed costs are provided below: 2 3 Selling Price per Unit $ 4 Variable Costs per Unit 5 Direct Materials 6 Direct Labor 7 Variable Manufacturing Overhead 8 Variable Selling Cost 9 10 Total Expected Fixed Costs 36.00 7.00 5.00 2.50 1.50 100,000 11 12 13 Requirement One Calculate Fiesta Ponchos' average unit contribution margin 14 Average Unit Selling Price 15 Unit Variable Costs: Average Unit Contribution Margin 16 17 18 19 20 Total Unit Variable Costs 21 Average Unit Contribution Margin 22 Requirement Two Based upon this average unit contribution margin, determine the required sales volume 23 of ponchos that Fiesta Ponchos must sell in order to breakeven. 24 25 Fixed Costs Breakeven in Units 26 Add: Target Operating Income 27 Total Required Contribution Margin 28 Divide by: Average Unit CM Question 1 Question 2 Question 3 +