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5 Shoosta Ltd produces two different products with the following monthly data: (11 marks) A1 A2 Total Selling price per unit $100 $12 Variable cost
5 Shoosta Ltd produces two different products with the following monthly data: (11 marks) A1 A2 Total Selling price per unit $100 $12 Variable cost per unit $ 70 $3 Expected unit sales 21,000 14,000 35,000 Sales mix 60 percent 40 percent 100 percent Fixed costs $500,000 Assume the sales mix remains the same at all levels of sales. Round to the nearest unit of product, hundredth of a per cent, and nearest cent where appropriate. Required (show your workings for each question): a) Calculate the weighted average contribution margin per unit. (1 mark) ANSWER a): b) How many units in total must be sold to break even? (1 mark) ANSWER b): c) How many units of each product must be sold to break even? (1 mark) ANSWER C): Activate W Go to Settings d) How many units of each product must be sold to earn a monthly profit of $100,000? (3 marks) ANSWER d): HI5017 Final Assessment T3 2021 e) Prepare a contribution margin income statement for the month. (3 marks) ANSWER e): f) Would the CVP Analysis technique be appropriate for multi-product businesses operating during this global pandemic? Explain. (2 marks) ANSWER f)
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