E6-18 Analyzing Multiproduct CVP LO 6-6 Tiago makes three models of camera lens.

Question

E6-18 Analyzing Multiproduct CVP LO 6-6 Tiago makes three models of camera lens. Its product mix and contribution margin per unit follow: Percentage of Unit Contribution Margin per Lens A Lens B Lens C sales 22% 35 43 $38 30 Required 1. Determine the weighted-average contribution margin per unit. Round your intermediate calculations and final answer to 2 decimal places.) unit 2. Determine the number of units of each product that Tiago must sell to break even if fixed costs are $179,000. (Round intermediate calculations and final answers to the nearest whole number.) Units of Units of 8 Units of Units Units Units 3. Determine how many units of each product must be sold to generate a profit of $79,000. (Round intermediate calculations and final answers to the nearest whole number.) Units of Units of 8 Units of Units Units Units

Explanation / Answer

Weighted Average contribution perr unit: Weights CM per unit Weighted CM Lens A 22% 38 8.36 Lens B 35% 30 10.5 Lens C 43% 43 18.49 Weighted Average contribution perr unit: 37.35 Break even Point in units: Fixed cost 179000 Divide: Wieghted average contribution per unit 37.35 Break even in units 4793 Units of A (4793*22%) 1054 Units Units of B (4793*35%) 1678 units Units of C (4793*43%) 2061 Units Desired contribution: (179000+79000) 258000 Divide: Weighted Av. Contribution 37.35 Target sale in units 6908 Units of A (6908*22%) 1520 Units Units of B (6908*35%) 2418 Units Units of C (6908*43%) 2970 Units

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