Perrson Company makes two types of backpacks. Data for the company\'s activity d
ID: 2443333 • Letter: P
Question
Perrson Company makes two types of backpacks. Data for the company's activity during a typical month are presented below. Use this data for questions 15 to 17.
School
Hiker
Model
Model
Sales units
40,000
40,000
Selling price per unit
$6
$18
Variable expense per unit
$2
$10
The company's total fixed expenses are $80,000. There are no beginning or ending inventories.
Required:
What is the per unit contribution margin for each of the two models?
School
Hiker
Model
Model
Sales units
40,000
40,000
Selling price per unit
$6
$18
Variable expense per unit
$2
$10
Explanation / Answer
Per unit contribution School 6-2= 4 Hiker 18-10= 8 At the same sales mix there is an average of 6 per unit sold so breakeven is 80,000/6 13,334 units. So at the same mix we have 6667*6 +6667*18= 160,008.
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