Saldina Hardware is organized into 3 departments. The following sales and cost data are available for the prior year.

Dept A Dept B Dept C

Sales $265,000 $850,000 $900,000

Variable costs 106,000 510,000 720,000

Contribution Margin 159,000 340,000 180,000

Less fixed costs 60,000 85,000 92,000

Profit 99,000 255,000 88,000

Required:

a. What is the weighted average contribution margin ratio?

b. What level of sales is needed to earn a profit of $500,000 assuming the current mix?

c. Saldina Hardware places an advertisement in the local paper each week. All else equal, which department would you emphasize in the advertisement?