Reference no: EM132590957
Bubble Bubble (BB) sells two version of bubble tea, BB1 and BB2 respectively. The following are BB monthly operating information:
BB1 BB2
Price RM 8/unit RM 12/unit
Variable cost/unit RM 2/unit RM 3/unit
Monthly expected sales 1,500 cups 1,000 cups
Monthly fixed costs RM15,000
Question A. Calculate the combine weighted average contribution margin per unit.
Question B. Calculate how many total combine units of BB1 and BB2 need to sell to break-even.
Question C. Calculate how many BB1 and how many BB2 to sell each month to generate a monthly before tax profit of RM 5,000.
Question D. Describe the assumptions when doing break-even analysis for multiple products and explain why those assumptions reasonably reflect the real situation in the short term.