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Estimate what is the weighted average contribution margin

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Megarock Pty Ltd makes and sells Guitars. Below is a breakdown of their performance from the previous year.

Sales                       6,500 guitars

Selling Price               $650/guitar

Direct Materials           $100/guitar

Direct Labour              $75/guitar

Sales Commission          $35/guitar

Total Fixed Costs          $2,600,000

Question a) Calculate their profits for the year.

Question b) What is the breakeven point in units and dollars?

Megarock want to start producing drum kits. The estimated sales projections are as follows

                                           Guitars                         Drumkits

Estimated Sales                      6,500 guitars          3,250 drumkits

Sales Price                                $650                      $1,500

Variable Costs                             $210                     $750

Total Fixed Costs                         $3,400,000

Question c) What is the Weighted Average Contribution Margin? (Round to the nearest cent)

Question d) What would be the breakeven units? (In total and per product)

Reference no: EM132567588

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