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Question - Shoosta Ltd produces two different products with the following monthly data:
A1
A2
Total
Selling price per unit
$100
$12
Variable cost per unit
$70
$3
Expected unit sales
21,000
14,000
35,000
Sales mix
60 percent
40 percent
100 percent
Fixed costs
$500,000
Assume the sales mix remains the same at all levels of sales.
Required -
a) Calculate the weighted average contribution margin per unit.
b) How many units in total must be sold to break even?
c) How many units of each product must be sold to break even?
d) How many units of each product must be sold to earn a monthly profit of $100,000?
e) Prepare a contribution margin income statement for the month.
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