Question
To determine the sales revenue at the break-even point, I divided the fixed costs by weighted average contribution margin in the following problem: PharoahBottle Shop
To determine the sales revenue at the break-even point, I divided the fixed costs by weighted average contribution margin in the following problem:
PharoahBottle Shop has two divisions, Wine and Beer. The sales mix is70% Wine and30% Beer.Pharoah's annual fixed costs are estimated at $171000. The average selling price in the Wine division is $45with a variable cost of $18. The average selling price in the Beer division is $18with a variable cost of $9. What isPharoah's sales revenue at the break-even point? My result is: 300,000. 171,000/57% is it correct?
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