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Handy Home sells windows (80% of sales) and doors (20% of sales). The selling price of each window is $390 and of each door is $880. The variable cost of each window is $220 and of each door is $540. Fixed costs are $1,203,600. (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: 1 Weighted-average contribution margin per unit Total fixed costs $ 1,203,600 1 (3) Compute the number of units of each product that will be sold at the break-even point. Windows units Doors units = = Break Even Units Break Even Units 0

Handy Home sells windows (80% of sales) and doors (20% of sales). The selling price of each window is $390 and of each door is $880. The variable cost of each window is $220 and of each door is $540. Fixed costs are $1,203,600. (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: 1 Weighted-average contribution margin per unit Total fixed costs $ 1,203,600 1 (3) Compute the number of units of each product that will be sold at the break-even point. Windows units Doors units = = Break Even Units Break Even Units 0

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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4 Handy Home sells windows (80% of sales) and doors (20% of sales). The selling price of each window is $390 and of each door is $880. The variable cost of each window is $220 and of each door is $540. Fixed costs are $1,203,600. (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: I 1 1,203,600 1 Total fixed costs $ Denominator: Weighted-average contribution margin per unit (3) Compute the number of units of each product that will be sold at the break-even point. Windows units Doors units = = Break Even Units Break Even Units 0
Transcribed Image Text:4 Handy Home sells windows (80% of sales) and doors (20% of sales). The selling price of each window is $390 and of each door is $880. The variable cost of each window is $220 and of each door is $540. Fixed costs are $1,203,600. (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: I 1 1,203,600 1 Total fixed costs $ Denominator: Weighted-average contribution margin per unit (3) Compute the number of units of each product that will be sold at the break-even point. Windows units Doors units = = Break Even Units Break Even Units 0
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