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Max Company manufactures and sells three products: Good, Better, and Best. Annual fixed costs are $5,100,000, and data about the three products follow. Good Better
Max Company manufactures and sells three products: Good, Better, and Best. Annual fixed costs are $5,100,000, and data about the three products follow.
Good | Better | Best | |||||||||
Sales mix in units | 30 | % | 50 | % | 20 | % | |||||
Selling price | $ | 370 | $ | 470 | $ | 620 | |||||
Variable cost | 160 | 210 | 310 | ||||||||
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 $255,000.
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