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Safety First is a manufacturer of life jackets, life vests and buoyancy aids. They have provided the following information relating to the sales of their
Safety First is a manufacturer of life jackets, life vests and buoyancy aids. They have provided the following information relating to the sales of their products in 2020:
2. Safety First is a manufacturer of life jackets, life vests and buoyancy aids. They have provided the following information relating to the sales of their products in 2020: Sales mix (8,500 units) Selling price Variable cost/unit Life Jackets Life Vests 2,000 $120 $45 Buoyancy aids 2,600 3,900 $110 $85 $30 $25 Total Fixed costs = $515,000 Required: A. Calculate the break-even point in total units and units per product for 2020, using the following table: (5 marks) Life Jackets Life Vestse Buoyancy Aids Total J Unit sales Contribution margin Sales mix % Weighted Average Contribution Mareind B. Calculate the total profit for 2020. Show all your workings. [2 marks] Student Name: C. Safety First is rearranging its store and wants to ensure that they make the best use of the limited space available to maximise sales possibilities. They have 150 metres of space available, and the 3 products use up space as follows: Life Jackets Life Vests Buoyancy Aids Contribution margin per producte $75 $80 $604 Minimum shelf space required per 2.5 1.2 1.54 product How should the shelf space (150 metres) be allocated to the 3 products to maximise the profits? Justify your reasons for the space allocation using the relevant figures calculated above. (8 marks)Step by Step Solution
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