Question
Boise Company manufactures and sells three products: Good, Better, and Best. Annual fixed costs are $3,315,000, and data about the three products follow. Good Better
Boise Company manufactures and sells three products: Good, Better, and Best. Annual fixed costs are $3,315,000, and data about the three products follow.
Good | Better | Best | |
Sales Mix in Units | 30% | 50% | 20% |
Selling Price | 250 | 350 | 500 |
Variable Price | 100 | 150 | 250 |
Required:
A. Determine the weighted-average unit contribution margin.
B. Determine the break-even volume in units for each product.
C. Determine the total number of units that must be sold to obtain a profit for the company of $234,000.
D. Assume that the sales mix for Good, Better, and Best is changed to 50%, 30%, and 20%, respectively. Will the number of units required to break-even increase or decrease? Explain.
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Cost Management Accounting And Control
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6th Edition
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