Question
Bearcat Paws produces two sizes of Christmas Ornaments. The selling prices and variable costs are as follows: Small Large Selling price per ornament $8.00 $20.00
Bearcat Paws produces two sizes of Christmas Ornaments. The selling prices and variable costs are as follows: Small Large Selling price per ornament $8.00 $20.00 Variable cost per ornament 4.00 8.00 The company sells three small Christmas ornaments for every large Christmas ornament. The contribution margin income statement for the year ended December 31, 2015 follows: Sales revenue $225,000 Variable costs 90,000 Contribution margin 135,000 Fixed costs 75,000 Profit $60,000 Required 1. Calculate the weighted average contribution margin per unit for Bearcat Paws. 2. Determine the break-even point in units. 3. Determine the number small and the number of large ornaments that would need to be produced at the break-even point.
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