The garden supply company is introducing various aged trees to their product range in 2021. They have provided the following information relating to its planned activities.

 Calculate the contribution margin, sales mix and weighted average cost margin for each product. (6 marks)

Calculate the break-even point in total units and units per product based on the data. (4 marks)

Management is now considering increasing the price of 1 year old trees to $17 with an expected drop in volume to 15,000 trees while lowering the price of 3 year old trees to $35 with an expected increase in volume to 20,000 trees. There would be no change to the price and sales volume of 2 year old trees. Implementing this initiative would increase annual fixed costs by $10 000. On the available data, would you recommend the initiative?

Selling price Variable cost/unit Expected Sales Volume Total fixed cost = $200,000 I year old $15 $10 25,000 2 years old $24 $16 15,000 3 years old $40 $25 10,000