Managerial Accounting: Tools for Business Decision Making
7th Edition
ISBN: 9781118334331
Author: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
Publisher: WILEY
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Question
Chapter 6, Problem 6.9BE
(a)
To determine
Contribution Margin Ratio: The contribution margin ratio shows the amount of difference in the actual sales value and the variable expenses in percentage. This margin indicates that percentage which is available for sale above the fixed costs and the profit.
To Determine: The weighted-average contribution margin ratio.
(b)
To determine
Break-Even Sales: Sales volume required to cover the fixed and variable costs and left out with neither profit nor loss is called break-even point of sales.
To Determine: The amount of each type of candle that must be sold to break even.
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Students have asked these similar questions
Bright Force Inc. produces and sells lightning fixtures. An entry light has a total cost of $90 per unit, of which $50 is product cost and $40 is selling and administrative expenses. In addition, the total cost of $90 is made up of $55 variable cost and $35 fixed cost. The desired profit is $20 per unit. Determine the markup percentage on product cost.
Vaughn Candle Supply makes candles. The sales mix (as a percentage of total dollar sales) of its three product lines is birthday candle 30%, standard tapered candles 50%, and large scented candle 20%. The contribution margin ratio of each candle type is shown below.
Candle Type
Contribution Margin Ratio
Birthday
20%
Standard tapered
30%
Large scented
40%
a/ What is the weighted-average contribution margin ratio?
Vaughn Candle Supply makes candles. The sales mix (as a percentage of total dollar sales) of its three product lines is birthday candle 30%, standard tapered candles 50%, and large scented candle 20%. The contribution margin ratio of each candle type is shown below.
Candle Type
Contribution Margin Ratio
Birthday
20%
Standard tapered
30%
Large scented
40%
a/ What is the weighted-average contribution margin ratio?
b/ If the company’s fixed costs are 450,080 per year, what is the dollar amount of each type of candle that must be sold to break even?
Chapter 6 Solutions
Managerial Accounting: Tools for Business Decision Making
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