NoFly

weighted-average unit contribution margin

Sales Mix Unit Contribution Weighted-Average Unit
Model Percentage Margin Contribution Margin
A12 60% $15 ($sell price $ 9.00
B22 15% $variable costs) 4.50
C124 25% $30 ($100 $70) 25.00
$100 ($400 $300) $38.50

NoFly sell in order to break even

Total break-even units = ($fixed costs $ weighted-average unit cont margin) =
7,000 units

Total break-even
point = ($fixed costs %)

Birthday $TotBreakEvenPoint X .30 = $ 450,000

Standard tapered $1,500,000 X .50 = 750,000
Large scented $1,500,000 X .20 = 300,000
$1,500,000
Faune Furniture
(a) Sales Mix
Bedroom Division $bedroom sales $total = .40
Dining Room Division $750,000 $1,250,000 = .60

Contribution Margin Ratio

Bedroom Division ($bedroom cont marg $bedroom sales) =
.55
Dining Room Division ($300,000 $750,000) = .40
(b) Weighted-average contribution
margin ratio = (bedroom cont marg% X dining cont marg) +
(bedroom sales mix X dining sales mix) = .46
The Rock Company/Burns Company

Variable Costing
Direct materials
Direct labor
Variable manufacturing overhead

Absorption Costing
Direct materials
Direct labor
Variable manufacturing overhead
Fixed manufacturing overhead

Absorption Costing per unit

Direct materials
Direct labor
Variable manufacturing overhead
Fixed manufacturing overhead ($fixed manufacturing overhead units produced)

Snow Cap Springs

a. sales mix as a function of units sold for the three products.
b. weighted-average unit contribution margin.
c. total number of units that the company must produce to break even.
d. number of units of each model that the company must produce to break even.

(a) The sales mix percentages as a function of units sold is:

Basic Basic Plus Premium

Units sold total = 450 1,500 = 30% 300 1,500 = 20%
50%

(b) The weighted-average unit contribution margin is:

[sales mix% X ($selling price $variable costs)] + [.3 X ($400 $285)] + [.20 X ($800
$415)] = $139.

(c) The break-even point in units is: $fixed costs $weighted avg unit cont marg
= 1,300 units.

(d) The break-even units to produce for each product are:

Basic: break even units X sales mix% =650 units
 Basic Plus 1,300 units X 30% = 390 units
Premium: 1,300 units X 20% = 260 units
1,300 units

Siren Company

(a)
Unit Cost
Direct materials $ 7.50
Direct labor 3.45
Variable manufacturing overhead 5.80
Manufacturing cost per unit $16.75

(b)
SIREN COMPANY
Income Statement
For the Year Ended December 31, 2017
Variable Costing

Sales (80,000 lures X $25) $2,000,000

Variable cost of goods sold
(80,000 lures X $16.75) $1,340,000
Variable selling and administrative
expenses (80,000 lures X $3.90) 312,000 1,652,000
Contribution margin 348,000
Fixed manufacturing overhead 225,000
Fixed selling and administrative
expenses 210,100 435,100
Net Income (loss) $ (87,100)

(c)
Unit Cost
Direct materials $ 7.50
Direct labor 3.45
Variable manufacturing overhead 5.80
Fixed manufacturing overhead ($225,000 90,000) 2.50
 Manufacturing cost per unit $19.25

(d)
SIREN COMPANY
Income Statement
For the Year Ended December 31, 2017
Absorption Costing

Sales (80,000 lures X $25) $2,000,000

Cost of goods sold (80,000 lures X $19.25) 1,540,000
Gross profit 460,000
Variable selling and administrative expenses
(80,000 lures X $3.90) $312,000
Fixed selling and administrative expenses 210,100 522,100
Net Income $ (62,100)