2-2

Current Designs manufactures two different types of kayaks, rotomoulded kayaks and composite kayaks. The following information is available for each product line.

		Rotomoulded		Composite
Sales price/unit		$840		$1,760
Variable costs/unit		$500		$1,180

The companys fixed costs are $722,000. An analysis of the sales mix identifies that rotomoulded kayaks make up 80% of the total units sold.

(a)

	Your answer is correct.

Determine the weighted-average unit contribution margin for Current Designs.

Weighted-average unit contribution margin

$388

(CORRECT!)

Attempts: 1 of 1 used

(b)

	Your answer is correct.

Determine the break-even point in units for Current Designs and identify how many units of each type of kayak will be sold at the break-even point. (Round answers to 0 decimal places, e.g. 5,275.)

Break-even Sales

$1861

units

(CORRECT)!

		Rotomolded Kayaks			Composite Kayaks
Break-even Sales Distribution		1489	units		372	units

(CORRECT!)

Attempts: 1 of 1 used

(c)

Assume that the sales mix changes, and rotomoulded kayaks now make up 70% of total units sold. Calculate the total number of units that would need to be sold to earn a net income of $1.76 million and identify how many units of each type of kayak will be sold at this level of income. (Round answers to 0 decimal places, e.g. 5,275.)

Required Sales

units

		Rotomolded Kayaks			Composite Kayaks
Break-even Sales Distribution			units			units

Answers to Question A and B are correct. Please use information from A,B to answer question C. Thank You