Problem 3 (6 marks)

Hurley manufactures a line of skateboard that are sold in General Pants store. For the purpose of a cost volume profit analysis, the manager has divided the sale of skateboard into two categories:

Product Type	Sales Price	Cost	Sale Commission
Wood	$350	$90	$25
Dregs	$280	$70	$15

Seventy per cent of the skateboard sales are Dregs. Hurley annual fixed cost are $351,900 (ignore income tax).

Required:

1.Calculate the unit contribution margin for each product type (2 marks)

2. What is the Hurley manufacturers sale mix? (1 mark)

3. Calculate the weighted average unit contribution margin, assuming a constant sales mix (1 mark)

4. What is the Hurley manufacturers break-even sales volume in dollars? Assume a constant sales mix (2 marks)