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Vaughn Candle Supply makes candles. The sales mix (as a percentage of total dollar sales) of its three product lines is birthday candles 30%, standard tapered candles 55%, and large scented candles 15%. The contribution margin ratio of each candle type is shown below.
Candle Type Contribution Margin Ratio
Birthday 20%
Standard tapered 30%
Large scented 50%
Question 1 : What is the weighted-average contribution margin ratio?
Question 2 : If the company's fixed costs are $406,500 per year, what is the dollar amount of each type of candle that must be sold to break even?
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