Juniper Corp. makes three models of insulated thermos. Juniper has $319,000 in t

Question

Juniper Corp. makes three models of insulated thermos. Juniper has $319,000 in total revenue and total variable costs of $159,500. Its sales mix is given below: Percentage of total sales Thermos A Thermos B Thermos C 28% 45 27 Required 1. Calculate the overall weighted-average contribution margin ratio Weighted Average CM Ratio 2. Determine the total sales revenue Juniper needs to break even if fixed costs are $98,750. (Round your answer to the nearest whole number.) Break-Even Point 3. Determine the total sales revenue needed to generate a profit of $108,500. (Round your answer to the nearest whole number.) Target Sales 4. Determine the sales revenue from each product needed to generate a profit of $108,500. (Round your answers to the nearest whole number.) Thermos A Thermos EB Thermos C

Explanation / Answer

1.

CM ratio = (Sales – variable cost)/variable cost

                      = (319000 – 159500)/319000

                       = 159500/319000

                         = .5 or 50%

2.

BEP = Total fixed cost/ CM ratio

            = 98750/.5

             =$197500

3.

Required sales = (98750 + 108500)/.5

                              = $414500

4.

Sales A = 414500* 28% = 116060

Sales B = 414500* 45% = 186525

Sales C = 414500* 27% = 111915

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