Question
Megarock Pty Ltd makes and sells Guitars. Below is a breakdown of their performance from the previous year. Sales 6500 guitars Selling Price $650/guitar Direct
Megarock Pty Ltd makes and sells Guitars. Below is a breakdown of their performance from the previous year.
Sales 6500 guitars
Selling Price $650/guitar
Direct Materials $100/guitar
Direct Labour $75/guitar
Sales Commission $35/guitar
Total Fixed Costs $2,600,000
a) Calculate their profits for the year
b) What is the breakeven point in units and dollars
Megarock want to start producing drum kits. The estimated sales projections are as follows
Guitars Drumkits
Estimated Sales 8400 guitars 5600 drumkits
Sales Price $650 $1,500
Variable Costs $210 $750
Total Fixed Costs $3,400,000
c) What is the Weighted Average Contribution Margin? (Round to the nearest cent)
d) What would be the breakeven units (In total and per product)
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