Product A Product B Total Selling price (SP) Less: Variable cost (VC) Contribution margin (CM) 10.00 18.00 4.00 10.00 6.00 8.00 Multiplied by: % Sales Mix Weighted Contribution Margin (WCM) 2/3 1/3 4.00 2.67 6.67 Fixed cost (FC) 1,000,000 Target profit 100,000 1,100,000 Units to produce and sell 110,000 55,000 165,000
Product A Product B Total Selling price (SP) Less: Variable cost (VC) Contribution margin (CM) 10.00 18.00 4.00 10.00 6.00 8.00 Multiplied by: % Sales Mix Weighted Contribution Margin (WCM) 2/3 1/3 4.00 2.67 6.67 Fixed cost (FC) 1,000,000 Target profit 100,000 1,100,000 Units to produce and sell 110,000 55,000 165,000
Financial & Managerial Accounting
14th Edition
ISBN:9781337119207
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Carl Warren, James M. Reeve, Jonathan Duchac
Chapter20: Variable Costing For Management Analysis
Section: Chapter Questions
Problem 20.10EX
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