Federer Ltd manufactures and sells two tennis racquets: Promaster and Grandslam. Annual

fixed costs are $$4,510,000.$ The company is subject to a tax rate of $30\%.$

Promaster Grandslam

Sales mix in units $40\%60\%$

Selling price $$210$ $$260$

Variable costs $$115$ $$140$

Required:

$1)$ Calculate the weighted average contribution margin, assuming a constant sales mix.

$2)$ Determine the breakeven volume in units and in sales dollars in total and for

each product? Assume a constant sales mix.

$3)$ How many units of each product must be sold to earn a target net profit after tax of

$$770,000?$ Assume a constant sales mix.

$4)$ Assume the sales mix is changed to $45\%$ and $55\%.$ Will the number of units required

to break even be increased or decreased? Explain why.