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.