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

ekkarill92 answered 1 year ago

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