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Penny's Paper and Pens manufactures and sells three colour of pens, red, black, and blue. The company sells 5 units of Blue for every unit
Penny's Paper and Pens manufactures and sells three colour of pens, red, black, and blue. The company sells 5 units of Blue for every unit of red and 2 units of black for every unit of red. Hence, the sales mix is 1:2:5. The company incurred in $120,000 total fixed costs. Penny's Paper and Pens has provided the following data on selling price and variable cost per unit for each product in the mix. Use the given information and weighted average contribution margin calculations to complete the following table. RED BLACK BLUE Selling price $100 $120 $50 Variable cost per unit $60 $90 $40 Contribution margin per unit $40 $30 $10 Contribution margin ratio 40% 25% 20% Sales Mix Ratio Weighted Average Contribution Margin Per Product WACM Dollars WACM Break-Even Product Break-Even Point Units Product Break-Even Point Dollars Net Income ite
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