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Smarty Inc. Ltd produces two different products with the following monthly data: P1 P2 Total Selling price per unit 5100 S12 Variable cost per unit
Smarty Inc. Ltd produces two different products with the following monthly data: P1 P2 Total Selling price per unit 5100 S12 Variable cost per unit S 60 S 3 Expected unit sales 21,000 14,000 35,000 Sales mix 60 percent 40 percent 100 percent Fixed costs $50,000 Assume the sales mix remains the same at all levels of sales. | Required: a) Calculate the weighted average contribution margin per unit. {1 mark) b} How many units in total must be sold to break even? {1 mark} c) HowI many units of each product must be sold to break even? [1 mark] :3} How many units of each product must be sold to earn a monthly prot of $100,000? {3 marks] e] Prepare a contribution margin income statement for the month. [3 marks] f] If the sales mix shifts more toward the P1 product than the P2 product, would the breakeven point in units increase or decrease? Explain. [Detail calculations are not necessary but mayr be helpful in confirming your answer.) {2 marks} SHOW YOUR WORKING
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