Jonah Hill Company manufactures two products. Information about the two products is as follows:

Product X

Product Y

Selling price per unit

$80

$30

Variable costs per unit

40

20

Contribution margin per unit

$40

$10

The company expects fixed costs to be $185,000. The firm expects 70% of its sales (in units) to be Product X and 30% to be Product Y (a sales mix of 7:3).

a. Calculate the weighted average contribution margin or contribution margin by package

(4 marks)

b. Determine the breakeven point in total units, and how much would come from products X and Y (7 marks)

c. Determine the level of sales (in dollars) necessary to generate operating income of $185,000 (6 marks)

d. Identify and explain 3 separate ways in which the company can use the above information to improve overall profitability.