Compute weighted average contribution margin

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Reference no: EM131202413

Compute Weighted Average Contribution Margin

Waterside Company sells two products, Yellow models and Striped models. Yellow models sell for $50 per unit with variable costs of $30 per unit. Striped models sell for $60 per unit with variable costs of $25 per unit. Total fixed costs for the company are $20,000. Waterside Company typically sells one yellow model for every three striped models.

Requirements:

(a) Compute the weighted-average contribution margin per unit.

(b) Compute the number of yellow models and striped models the company must sell to break even.

(c) Assuming the data above in part (b), compute the breakeven point in terms of sales revenue for both the yellow and striped model.

Reference no: EM131202413

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