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27. The sales manager of Acme Enterprises is considering expanding sales by producing three different versions of their product. Each will be targeted by the
27. The sales manager of Acme Enterprises is considering expanding sales by producing three different versions of their product. Each will be targeted by the marketing department to different income levels and will be produced from three different qualities of materials. After reviewing the sales forecasts, the sales department feels that 40% of units sold will be the original product, 35% will be new model #1 and the remainder will be new model #2. The following information has been assembled by the sales and the production department. Original Model #1 Model #2 Sales price (per unit) $100.00 $70.00 $50.00 Material cost 45.00 30.00 20.00 Direct labor 20.00 15.00 10.00 Variable overhead 15.00 11.25 7.50 The fixed costs associated with the manufacture of these three products are $175,000 per year. Required: (a) What is the weighted average contribution margin per unit? (Show 4 decimal places). (b) What is the break-even total unit? (c) What is number of units of each product that would be sold at the break-even point? Original: Model#1: Model#2: (d) What is the break-even total revenue (sales dollars)? and
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