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Calculate the weighted average unit contribution margin

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Reference no: EM132546597

H&C Pty Ltd sells three types of electronic garden tools - Weeders, Hedge Clippers, and Leaf blowers. Selected information on the rackets is given below:

                                               Weeders                   Hedge clippers                       Leaf blowers

Sales in units (per annum)           30 000                      20 000                      50 000

Unit selling price                            $90                        $280                         $350

Variable manufacturing cost per unit    $30                       $100                       $200

Variable selling cost per unit                $10                        $55                          $70

All sales are made through the company's own retail outlets. The company has the following fixed costs:

Per annum

Fixed manufacturing cost                    $700,000

Fixed selling and administrative costs    $10,000

Total                                               $710,000

Required:

Question (a) Calculate the unit contribution margin for each product type.

Question (b) Calculate the weighted average unit contribution margin, assuming a constant sales mix.

Question (c) Compute the break-even point in units for the company as a whole.

Question (d) Compute the break-even point in units for each product.

Question (e) Determine the total number of units that must be sold to obtain a target profit of $80,000 for the company

Reference no: EM132546597

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