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Handy Home sells windows (60% of sales) and doors (40% of sales). The selling price of each window is $340 and of each door is $780. The variable cost of each window is $195 and of each door is $490. Fixed costs are $1,146,950.

Handy Home sells windows (60% of sales) and doors (40% of sales). The selling price of each window is $340 and of each door is $780. The variable cost of each window is $195 and of each door is $490. Fixed costs are $1,146,950.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Handy Home sells windows (60% of sales) and doors (40% of sales). The selling price of each window is $340 and of each door is $780. The variable cost of each window is $195 and of each door is $490. Fixed costs are $1,146,950. (1) Compute the weighted-average contribution margin. Sales mix Windows Doors Contribution margin Weighted average contribution margin (2) Compute the break-even point in units using the weighted-average contribution margin. Numerator: Denominator: Windows Doors Total (3) Compute the number of units of each product that will be sold at the break-even point. Sales mix Number of units to break even. Total per unit Break Even Units Break Even Units Unit sales at break-even point
Transcribed Image Text:Handy Home sells windows (60% of sales) and doors (40% of sales). The selling price of each window is $340 and of each door is $780. The variable cost of each window is $195 and of each door is $490. Fixed costs are $1,146,950. (1) Compute the weighted-average contribution margin. Sales mix Windows Doors Contribution margin Weighted average contribution margin (2) Compute the break-even point in units using the weighted-average contribution margin. Numerator: Denominator: Windows Doors Total (3) Compute the number of units of each product that will be sold at the break-even point. Sales mix Number of units to break even. Total per unit Break Even Units Break Even Units Unit sales at break-even point
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