Two different product lines are manufactured and sold by Cheche

Manufacturing Corp. Monthly fixed cost amounted to P90,000. Data with respect

to each product lines follows:

Product Selling price/unit Variable cost/unit Original sales mix

Cutie P10.00 P 5.00 60%

Sweetie 8.00 2.00 40%

Required:

1. Based on the original sales mix:

a. What is the weighted contribution margin per unit

b. What is the combined units to break-even?

c. How many number of units each product line sold in order to break even

Show necessary proofs.

2. Suppose the sales mix is 50-50 for each product line:

a. What is the weighted contribution margin ratio

b. What is the combined sales of the two product lines needed in order to

earn P30,000 after the 25% tax?

c. How much sales should each product be generated? Show proofs.

d. What is the margin of safety in peso sale, in units and in percentage for

each product lines and the company as whole?