A
company sells two products: a standard model and a deluxe model.
The standard model sells for $50 and has a contribution margin
ratio of 40%. The deluxe model sells for $100 and has a
contribution margin ratio of 50%. Last year, the company sold 5000
standard units and 2500 deluxe units.
There is $200,000 of cost that is “fixed” in the sense that it
does not vary with the number of units produced. However, $100,000
of this cost is...