Exercise 5-22 (Algo) CVP analysis with two products LO P3 Handy Home sells windows (60% of sales) and doors (40% of sales). The selling price of each window is $280 and of each door is $660. The variable cost of each window is $165 and of each door is $430. Fixed costs are $861,350. (1) Compute the weighted average contribution margin. Weighted-average contribution margin (2) Compute the break-even point in units using the weighted average contribution margin. Numerator: 1 Denominator: 7 (3) Compute the number of units of each product that will be sold at the break-even point. Windows Doors units units Break Even Units Break Even Units
Exercise 5-22 (Algo) CVP analysis with two products LO P3 Handy Home sells windows (60% of sales) and doors (40% of sales). The selling price of each window is $280 and of each door is $660. The variable cost of each window is $165 and of each door is $430. Fixed costs are $861,350. (1) Compute the weighted average contribution margin. Weighted-average contribution margin (2) Compute the break-even point in units using the weighted average contribution margin. Numerator: 1 Denominator: 7 (3) Compute the number of units of each product that will be sold at the break-even point. Windows Doors units units Break Even Units Break Even Units
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Exercise 5-22 (Algo) CVP analysis with two products LO P3
Handy Home sells windows (60% of sales) and doors (40% of sales). The selling price of each window is $280 and of each door is
$660. The variable cost of each window is $165 and of each door is $430. Fixed costs are $861,350.
(1) Compute the weighted average contribution margin.
Weighted average contribution margin
(2) Compute the break-even point in units using the weighted average contribution margin.
Numerator:
1
Denominator:
7
(3) Compute the number of units of each product that will be sold at the break-even point.
units
units
Windows
Doors
Break Even Units
Break Even Units
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