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Handy Home sells windows (70% of sales) and doors (30% of sales). The selling price of each window is $350 and of each door is
Handy Home sells windows (70% of sales) and doors (30% of sales). The selling price of each window is $350 and of each door is $800. The variable cost of each window is $200 and of each door is $500. Fixed costs are $1,111,500. (1) Compute the weighted-average contribution margin. Sales mix Contribution margin Total per unit S 2.450.00 Windows 70% S 350.00 Doors 30% s 800.00 S 4.850.00 Weighted average contribution margin S 7.300.00 1 (2) Compute the break-even point in units using the weighted-average contribution margin. Numerator: Denominator: Total fixed costs Weighted average contribution margin per unit 1.111,500 1,950.00 Break Even Units Break Even Units 1 = S 1 S = 570 units (3) Compute the number of units of each product that will be sold at the break-even point. Sales mix Number of units to break even. Unit sales at break-even point Windows 70% Doors 30% Total
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