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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
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 80% of its sales (in units) to be Product X and 20% to be Product Y (a sales mix of 8:2).
- Calculate the weighted average contribution margin or contribution margin by package
- Determine the breakeven point in total units, and how much would come from products X and Y
- Determine the level of sales (in dollars) necessary to generate operating income of $185,000
Identify and explain 3 separate ways in which the company can use the above information to improve overall profitability.
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