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Max Company manufactures and sells three products: Good, Better, and Best. Annual fixed costs are $2,145,000, and data about the three products follow. Good Better
Max Company manufactures and sells three products: Good, Better, and Best. Annual fixed costs are $2,145,000, and data about the three products follow.
Good | Better | Best | |||||||||
Sales mix in units | 40 | % | 50 | % | 10 | % | |||||
Selling price | $ | 220 | $ | 320 | $ | 470 | |||||
Variable cost | 90 | 140 | 240 | ||||||||
Required:
- Determine the weighted-average unit contribution margin.
- Determine the break-even volume in units for each product.
- Determine the total number of units that must be sold to obtain a profit for the company of $280,500.
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