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Weighted average contribution margin

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Jamal & Co. makes and sells two types of shoes, Plain and Fancy. Data concerning these products are as follows:

Plain Fancy
Unit selling price \$19.00 \$32.00
Variable cost per unit 12.00 23.00

Sixty percent of the unit sales are Plain, and annual fixed expenses are \$46,800.

The weighted-average unit contribution margin is:

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Jamal & Co. makes and sells two types of shoes, Plain and Fancy. Data concerning these products are as follows:

Plain Fancy
Unit selling ...

Solution Summary

Solution helps in computing weighted average contribution margin

\$2.19

Al Corp: sales mix and weighted average contribution margin

Al Corporation sells three products J, K, and L. The following information was taken from a recent budget:
J K L
Unit sales 40,000 130,000 30,000
Selling price \$60 \$80 \$75
Variable cost 40 65 50

Total fixed costs are anticipated to be \$2,450,000.

1. Determine Al's sales mix.
2. Determine the weighted average contribution margin.
3. Calculate the number of units of J, K, and L that must be sold to break even.
4. If Al's desires to increase company profitability, should it attempt to increase or decrease the sales of product K relative to those of J and L? Please explain.

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