24) McGuire Corporation sells three products: R, S, and T. Budgeted information

Question

24) McGuire Corporation sells three products: R, S, and T. Budgeted information for the upe 24) accounting period follows. Product Sales Volume (Units) Selling Price Variable Cost 16,000 12,000 52,000 s 14 $ 9 10 6 ge unit contribution margin is: A) $4.00. B) $19.35. C) $3.55 D) $3.00. E) None of the answers is correct. 25) Ahmed & Co. makes and sells two types of shoes, Plain and Fancy. Data concerning these 25) products are as follows: Plain 20.00 12.00 Fancy 35 24.50 Unit selling price s 35.00 Variable cost per unit Sixty percent of the unit sales are Plain, and annual fixed expenses are $45,000 Assuming that the sales mix remains constant, the total number of units that Ahmed must sell to break even is: A) 2,647 B) 2,432 C) 4,737. D) 5,000. E) None of the answers is correct.

Explanation / Answer

24) Calculate weighted average contribution margin per unit :

so answer is c) $3.55

25) Weighted average contribution margin per unit = (8*60%+10.5*40%) = 9 per unit

Break even point = 45000/9 = 5000 units

so answer is d) 5000

Product contribution margin per unit Sales mix Weighted contribution margin per unit R 5 20% 1 S 4 15% 0.60 T 3 65% 1.95 Total 3.55

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