Reference no: EM132462216

Assume the Zeus Furniture Company sells two kinds of picnic tables, pine and redwood. At a 4:1 unit sales mix in which Midwest sells four pine tables for every redwood table, the following revenue and cost information is available.

                                Pine Table        Redwood Table          

Unit selling price           $200                  $600

Unit variable costs          $125                 $ 275

Unit contribution margin   $75                    $ 325

Fixed costs per month: $18,150

Required:

Assuming a 4:1 sales mix:

Question a) Calculate Zeus Furniture's current monthly average unit contribution margin.

Question b ) Break-even sales volume.

Question c) Number of units of Pine and Redwood tables at break-even point.

Question d) Describe what the effect a change in the sales-mix would have on contribution margin.