Problem
Malibu, Inc., which has fixed costs of $2,966,000, sells three products whose sales price, variable cost per unit, and percentage of sales units are presented in the table below.
|
Product A
|
Product B
|
Product C
|
|
Sales Price
|
$9.00
|
$14.00
|
$32.00
|
|
Variable Cost
|
$4.00
|
$7.00
|
$20.00
|
|
Sales Mix
|
55%
|
20%
|
25%
|
a. What is the weighted average unit contribution margin?
b. At the break-even point, how many units of Product A must be sold?
c. To make a profit of $1,124,000, how many units of Product B must be sold?