Alyssa's Boutique retails high end leather bags, wallets and shoes. The managers are aware that the mark-up on handbags is much higher than that on shoes. They have provided you with the following details: Product Line Bags Shoes Wallets Sales Mix 70% 25% 5% Contribution Margin Ratio 65% 30% 35% The company's fixed costs are $4,104,000. Required: a) Calculate the weighted average contribution margin ratio. (3 decimal places) b) Calculate the dollar amount of each type of service that the company must provide in order to break even.
Alyssa's Boutique retails high end leather bags, wallets and shoes. The managers are aware that the mark-up on handbags is much higher than that on shoes. They have provided you with the following details: Product Line Bags Shoes Wallets Sales Mix 70% 25% 5% Contribution Margin Ratio 65% 30% 35% The company's fixed costs are $4,104,000. Required: a) Calculate the weighted average contribution margin ratio. (3 decimal places) b) Calculate the dollar amount of each type of service that the company must provide in order to break even.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Problem 2
Alyssa's Boutique retails high end leather bags, wallets and shoes. The managers are aware that the
mark-up on handbags is much higher than that on shoes. They have provided you with the following
details:
Product Line
Bags
Shoes
Wallets
Sales Mix
70%
25%
5%
Contribution
Margin Ratio
65%
30%
35%
The company's fixed costs are $4,104,000.
Required:
a) Calculate the weighted average contribution margin ratio. (3 decimal places)
b) Calculate the dollar amount of each type of service that the company must provide in order to
break even.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fd8f34c27-d547-42cf-8513-49967d562251%2F4117302f-6056-4322-b36f-8b0aa379eadb%2Fw97fsw_processed.png&w=3840&q=75)
Transcribed Image Text:Problem 2
Alyssa's Boutique retails high end leather bags, wallets and shoes. The managers are aware that the
mark-up on handbags is much higher than that on shoes. They have provided you with the following
details:
Product Line
Bags
Shoes
Wallets
Sales Mix
70%
25%
5%
Contribution
Margin Ratio
65%
30%
35%
The company's fixed costs are $4,104,000.
Required:
a) Calculate the weighted average contribution margin ratio. (3 decimal places)
b) Calculate the dollar amount of each type of service that the company must provide in order to
break even.
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