In: Accounting
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?
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 | ||