Question
Over Oven makes and sells two models of stoves for home use: economy and deluxe. While the economy model is very basic, the deluxe version
Over Oven makes and sells two models of stoves for home use: economy and deluxe. While the economy model is very basic, the deluxe version has many special features. The company incurs fixed costs of $38,000 per month. Its planned sales mix in units is 34% economy and 66% deluxe. The following table indicates the selling price and variable costs for each option.
Economy | Deluxe | |
Selling Price | $490 | $970 |
Variable Cost | $210 | $360 |
Do not enter dollar signs or commas in the input boxes. Round the weighted average contribution margin to 2 decimal places. Round all other answers up to the nearest whole number. Calculate the contribution margins and break-even points, assuming the planned sales mix is maintained. Contribution Margin economy: Answer Contribution Margin deluxe: Answer Weighted Average Contribution Margin: Answer Break-even point (total): Answer Break-even point economy: Answer Break-even point deluxe: Answer
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