X Company is starting a new merchandising business and provides the following budgets for its two...

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X Company is starting a new merchandising business and provides the following budgets for its two products: Product Revenue $

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Answer 1

Answer #1

Total revenue = $514135+270940 = $785075

Contribution margin for A = 190278/514135 = 37%

CM for B = 53165 /270940 = 19.62%

Weighted average CM ratio = (0.37*514135/785075) + (0.1962*270940/785075) = 31%

Break even Sales = Fixed costs / weighted average CM ratio

= 235000 / 31%

= $758065

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Answer 2

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