Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Rally Quadcopters plans to sell a standard quadcopter (toy drone) for $40 and a deluxe quadcopter for $50. Rally purchases the standard quadcopter for $20
Rally Quadcopters plans to sell a standard quadcopter (toy drone) for $40 and a deluxe quadcopter for $50. Rally purchases the standard quadcopter for $20 and the deluxe quadcopter for $30. Management expects to sell two deluxe quadcopters for every three standard quadcopters. The company's monthly fixed expenses are $20,000. How many of each type of quadcopter must Rally sell monthly to breakeven? To earn $14,000? First identify the formula to compute the sales in units at various levels of operating income using the contribution margin approach. (Abbreviations used: Avg. = average, and CM = contribution margin.) ( Operating income Fixed expenses )= Weighed-avg. CM per unit = Breakeven sales in units Next compute the weighted average contribution margin per unit. First identify the formula labels, then complete the calculations step by step. Standard Sale price per unit 40 Deduct Variable expense per unit 20 Contribution margin per unit Sales mix in units Contribution margin Weighted average contribution margin per unit
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started