Pin Cushion Company produces two models of sewing basket. Information about Pin Cushions products is given below:

	Product A			Product B
Sales revenue	$	32,000		$	47,000
Less: Variable costs		13,000			21,400
Contribution margin	$	19,000		$	25,600
Total units sold		860			1,900

Pin Cushions fixed costs total $36,400.

Required:

1. Determine Pin Cushions weighted-average unit contribution margin and weighted-average contribution margin ratio.

2. Calculate Pin Cushions break-even units and break-even sales revenue.

3. Calculate the number of units of each product that must be sold to break even.

4. Calculate the total sales necessary for Pin Cushion to earn a profit of $64,000.

5. Calculate the sales revenue generated from each product line if Pin Cushion earns its target profit of $64,000.

6. Using the original information, calculate Pin Cushions degree of operating leverage.

Determine Pin Cushions weighted-average unit contribution margin and weighted-average contribution margin ratio. (Round your intermediate calculations to 2 decimal places. Round your CM per unit and weighted average CM ratio to two decimal places (i.e. .1234 should be entered as 12.34%.)

1.

Weighted-Average Unit CM
Weighted-Average CM Ratio		%

2.

Break-Even Sales Units		Units
Break Even Sales Revenue

3.

	No. of Units
Product A		Units
Product B		Units

4.

Target Sales Revenue

5.

Product A
Product B

6.

Degree of Operating Leverage