Question

In: Accounting

1. A company manufactures and sells two types of gloves – Warm and Cozy – for...

1. A company manufactures and sells two types of gloves – Warm and Cozy – for runners. Current financial data is provided below: WARM COZY Selling Price per pair $8.00 $12.00 VC per pair $2.00 $ 6.00 Number of pairs sold per month 600 200 Fixed costs = $2,250 per month a) Compute the break even in dollars for the company in Total?

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Expert Solution

WARM COZY
Selling Price           8.00         12.00
Less: Variable Cost           2.00           6.00
Contribution Margin           6.00           6.00 Total
Number of Unit      600.00      200.00        800.00
Sales 4,800.00 2,400.00     7,200.00
Sales Mix 66.67% 33.33% 100.00%
          5.33           4.00             9.33
Weighted Average Contribution Margin 4.00 2.00 6.00
Total
Fixed Costs     2,250.0
Weighted Average Contribution Margin           6.00
Break Even in Units      375.00
WARM COZY Total
Break Even Units Splits (375*66.67%/33.33%)      250.00      125.00        375.00
Selling Price 8.00 12.00
Break Even in Dollars 2,000.00 1,500.00     3,500.00

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