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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
750
450
300
1,500
Selling price
$250
$400
$800
Variable costs
$195
$288
$416
The company's total fixed costs to produce the filtration systems are $165,480.
(a) Determine the sales mix as a function of units sold for the three products.
(b) Determine the weighted-average unit contribution margin.
(c) Determine the total number of units that the company must produce to break even.
(d) Determine the number of units of each model that the company must produce to break even.
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