Question 10 pts 25 of 27 Oc This Quiz 55 pts pos EBClick the

Question: 10 pts 25 of 27 (Oc This Quiz: 55 pts pos EB(Click the icon to view the contribution margin income statement) expense of $2.00 anable and fxed F8 F6 F3 Ul

Solution

Requirement 1:

Weighted contribution margin per unit = $ 0.75 + $ 0.50 = $ 1.25

Total Fixed Expenses = $ 15,000.

Break-even sales in units = Total Fixed Expenses / Weighted Average Contribution Margin = $ 15,000 / 1.25 = 12,000 cups.

Small = 3/4 x 12,000 cups = 9,000 cups

Large = 1/4 x 12,000 cups = 3,000 cups

	Small	Large
Sales Price	$ 2.00	$ 4.00
Variable Expense	1.00	2.00
Contribution Margin	$ 1.00	$ 2.00
Weight	0.75	0.25
Weighted Contribution Margin	$ 0.75	$ 0.50