Exercise 19-6 Yard Tools manufactures lawnmowers, weed-trimmers, and chainsaws.

Question

Exercise 19-6 Yard Tools manufactures lawnmowers, weed-trimmers, and chainsaws. Its sales mix and unit contribution margin are as follows Unit Contribution Margin Lawnmowers Weed-trimmers Chainsaws Sales Mix 20 % 50 % 30% $29 $20 $36 Yard Tools has fixed costs of $3,857,000 Compute the number of units of each product that Yard Tools must sell in order to break even under this product mix. (Use Weighted-Average Contribution Margin Ratio rounded to 2 decimal places e.g. 0.25 and round final answers to 0 decimal places, e.g. 2,510.) Lawnmowers Weed-trimmers Chainsaws units units units

Explanation / Answer

CALCULAATE WEIGTHED AVERAGE CONTRIBUTION MARGIN :

Break even point = FIxed cost/Total weighted average contribution margin

                         = 3857000/26.60

Break even point = 145000 units

Lawnmowers = 145000*20% = 29000 units

Weed-Trimmers = 145000*50% = 72500 units

Chainsaws = 145000*30% = 43500 units

Salex Mix Unit contribution margin Weighted average contribution margin Lawnmowers 20% 29 5.80 Weed-Trimmers 50% 20 10.00 Chainsaws 30% 36 10.80 Total 26.60

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.