Question

Problem 4-14 Culver Tennis Racquet Co. produces and sells three models: Units sold Sales Less variable costs Contribution margin Less common fixed costs Profit Smasher 2,000 $160,300 73,800 $86,500 Basher 3,200 $168,100 69,600 $98,500 Dinker 3 ,200 $117,400 35,600 $81,800 Total 8,400 $445,800 179,000 266,800 141,900 $124,900 What is the weighted average contribution margin per unit? (Round answer to 2 decimal places, e.g. 15.25.) Weighted average contribution margins per unit LINK TO TEXT Calculate the break-even point in units assuming the current mix. (Round your answer to nearest whole units, e.g. 15.) Break-even point in units units LINK TO TEXT

Answer 1

Solution:
1)
Calculation of Weighted Average Contribution margin per unit:
	Smasher	Basher	Dinker	Total
Units sold (Given)	2000	3200	3200	8400
Contribution Margin	$86,500	$98,500	$81,800	$266,800
Contribution margin per unit (Contribution Margin/Units sold)	43.25000	30.78125	25.56250	$31.76
	($86500/2000)	($98500/3200)	($81800/3200)	($266800/8400)
Sales mix Ratio (Sales units/Total Sales units)	0.238095238	0.380952381	0.380952381	1
	(2000/8400)	(3200/8400)	(3200/8400)	(8400/8400)
Weighted average contribution Margin (Contribution margin per unit * Sales mix ratio)	10.29761905	11.72619048	9.738095238	$31.76
Weighted average contribution margin = $31.76 per unit
2)
Calculation of Break even point in units:
Break even points in units = Fixed Cost/ Weighted average contribution margin
$141900/$31.76
4467.88
Break even points in Units = 4468 units
3)
Calculation of Weighted average margin ratio :
	Smasher	Basher	Dinker	Total
Contribution Margin	$86,500	$98,500	$81,800	$266,800
Sales	$160,300	$168,100	$117,400	$445,800
Contribution Margin Ratio (Contribution Margin/Sales*100)	53.96132252	58.59607377	69.67632027	59.84746523
	($86500/160800*100)	($98500/168100*100)	($81800/117400*100)	($266800/445800*100)
Sales Mix (Calculated in Part 1)	0.238095238	0.380952381	0.380952381	1
Weighted Average Contribution Margin Ratio (Contribution Margin ratio *Sales Mix)	12.84793393	22.32231382	26.5433601	59.84746523
Weighted Average Contribution Margin ratio = 59.85%
4)
Calculation of Level of sales (in Dollars) to earn a profit of $135,900:
Level of sales = (Common Fixed Cost+Required profit)/Weighted average contribution ratio
($141900+$135900)/59.85%
$277800/59.85%
464160.401
Level of Sales = $464160
5)
Total Sales calculated	$464,160
	Smasher	Basher	Dinker	Total
Sales Mix (Calculated in Part 1)	0.238095238	0.380952381	0.380952381	1
Sales (In dollars) (Total Sales *Sales Mix)	$110,514	$176,823	$176,823	$464,160
	(464160*0.238095238)	(464160*0.380952381)	(464160*0.380952381)
Sales (In dollars)	$110,514	$176,823	$176,823	$464,160