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Weighted-average unit contribution margin – sales mix

Author:
July 13th, 2020

Snow cap Springs – sales mix -weighted average unit contribution margin

Snow cap Springs produces and sells water filtration systems for homeowners. Information regarding its three models is shown below:

                                                                                Basic                      Basic Plus             Premium             Total

Units sold                                                            868                         294                         238                         1,400

Selling price                                                        $251                       $396                       $800

Variable cost                                                      $190                       $285                       $416

The company accounts total fixed costs to produce the filtration systems are $139,051.

 

a)      Determine the sales mix as a function of units sold for three products.

b)      Determine the weighted average unit contribution margin.

c)       Determine the total number of units that the company must produce to breakeven.

 

d)      Determine the number of units of each model that the company must produce to breakeven. 

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