Purchase Solution

Al Corp: sales mix and weighted average contribution margin

Not what you're looking for?

Ask Custom Question

Al Corporation sells three products J, K, and L. The following information was taken from a recent budget:
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.

Purchase this Solution

Solution Summary

The solution carefully explains each question complete with the computations to arrive at the solution.

Solution Preview

please refer to the attachment for full details.

1. Determine Al's sales mix.
Products J K L Total
Sale price per unit $60 $80 $75.00  
Unit sales 40,000 130,000 30,000  
Revenue=Price*Unit $2,400,000 $10,400,000 $2,250,000 $15,050,000
Sales mix = Share in total Revenue
= Revenue i / Total Revenue 15.95% 69.10% 14.95% 100%

2. Determine ...

Purchase this Solution

Free BrainMass Quizzes
Accounting: Statement of Cash flows

This quiz tests your knowledge of the components of the statements of cash flows and the methods used to determine cash flows.

Learning Lean

This quiz will help you understand the basic concepts of Lean.

Paradigms and Frameworks of Management Research

This quiz evaluates your understanding of the paradigm-based and epistimological frameworks of research. It is intended for advanced students.

Business Ethics Awareness Strategy

This quiz is designed to assess your current ability for determining the characteristics of ethical behavior. It is essential that leaders, managers, and employees are able to distinguish between positive and negative ethical behavior. The quicker you assess a person's ethical tendency, the awareness empowers you to develop a strategy on how to interact with them.

Employee Orientation

Test your knowledge of employee orientation with this fun and informative quiz. This quiz is meant for beginner and advanced students as well as professionals already working in the HR field.