Exercise 22-18 CVP analysis using weighted-average contribution margin L.O. P4 H

Question

Exercise 22-18 CVP analysis using weighted-average contribution margin L.O. P4
Home Builders sells windows and doors in the ratio of 7:3 (windows:doors). The selling price of each window is $109 and of each door is $259. The variable cost of a window is $67.00 and of a door is $179.50. Fixed costs are $580,425.

(1)
Determine the weighted-average contribution margin per unit. (Round your answer to 2 decimal places. Omit the "$" sign in your response.)

Contribution margin?

(2) Determine the break-even point in units.

Break-even point?

(3) Determine the number of units of each product that will be sold at the break-even point. (Round your intermediate calculation to 2 decimal places.)


Unit sales of windows at break-even point?
Unit sales of doors at break-even point?

Explanation / Answer

2) Break-even point in composite units - cost = revenue 580,425 + 67 (7x) + 179.50 (3x) = 109 (7x) + 259 (3x) x = 1090 units, total = 10900 units 3) windows = 7x = 7630 dorrs = 3x = 3270

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