Question

Standlar Company makes wireless speakers. The standard model price is $360 and variable expenses are $210. The deluxe model price is $500 and variable expenses are $300. The superior model price is $1,600 and variable expense per unit is $600. Total fixed expenses are $300,000. Generally, Standlar sells 8 standard models and 4 deluxe models for every superior model sold .

1.Using sales mix stated in the fact from Figure to form a package what is the total contribution margin?

2.Refer to Figure, What is the number of standard models sold at break even.

2.Refer to Figure, What is the number of deluxe models sold at break even.

2.Refer to Figure, What is the number of suprior models sold at break even.

Answer 1

1.Using sales mix stated in the fact from Figure to form a package what is the total contribution margin?

total contribution margin

=($150 x 8) + ($200 x 4) + ($1,000 x1)

= $3,000
Answer: total contribution margin = $3,000

________________________________________________

2.Refer to Figure, What is the number of standard models sold at break even.

break even units

=Fixed cost / contribution margin per package

=$300,000 /$3000

=100 package

standard models sold at break even=100 package x 8

standard models sold at break even=800

__________________________________________________

2.Refer to Figure, What is the number of deluxe models sold at break even.

break even units

=Fixed cost / contribution margin per package

=$300,000 /$3000

=100 package

deluxe models sold at break even=100 package x 4

deluxe models sold at break even=400

__________________________________________________

3 Refer to Figure, What is the number of superior models sold at break even.

break even units

=Fixed cost / contribution margin per package

=$300,000 /$3000

=100 package

superior models sold at break even=100 package x 1

superior models sold at break even=100