Question
Apple builds three types of computer : General, Standard and Deluxe. Information these three products is as follows: General Standard Deluxe Total Selling price per
Apple builds three types of computer : General, Standard and Deluxe. Information these three products is as follows: General Standard Deluxe Total Selling price per unit $500 $800 $3200 Variable cost per unit $200 $300 $1600 Expected unit sales ( annual) 24,000 12,000 4,000 400,000 Sales mix 60 percent 30 percent 10 percent 100 percent Total annual fixed costs are $10,000,000. Assume the sales mix remains the same at all levels of sales. Required: a) Calculate the weighted average unit contribution margin, assuming a constant sales mix. b) What is break- even point? How many units of each computer must be sold to break even? c) How much is the total break-even sales dollars for the company? d) i) Explain what margin of safety ii) Calculate in sales dollars the margin of safety for Apple, assuming projected sales are $18.000,000?
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