Problem 3 (adapted)

Cagayan Company sells three products. Planned results for next year are as follows:

A B C

Unit Selling Price P10P8P4

Unit Variable Costs P4 P6P1

Sales Mix in pesos 25%25%50%

Total Fixed Costs P500,000

Required:

1.Compute the weighted contribution margin percentage.

2.Compute the sales in pesos required to earn a P100,000 profit.

3.Supposed now that the sales mix, in units, is 25%, 25%, 50%. Determine the

weighted contribution margin per unit.

4.Determine the total unit sales needed to earn a P100,000 profit.