Vaughn Candle Supply makes candles. The sales mix (as a percentage of total dollar sales) of its three product lines is birthday candle 30%, standard tapered candles 50%, and large scented candle 20%. The contribution margin ratio of each candle type is shown below.Candle TypeContribution Margin RatioBirthday20%Standard tapered30%Large scented40%a/ What is the weighted-average contribution margin ratio?b/ If the company’s fixed costs are 450,080 per year, what is the dollar amount of each type of candle that must be sold to break even?

a. Calculate the weighted average contribution margin ratio:

Answered: Vaughn Candle Supply makes candles. The…

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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Vaughn Candle Supply makes candles. The sales mix (as a percentage of total dollar sales) of its three product lines is birthday candle 30%, standard tapered candles 50%, and large scented candle 20%. The contribution margin ratio of each candle type is shown below.

Candle Type	Contribution Margin Ratio
Birthday	20%
Standard tapered	30%
Large scented	40%

a/ What is the weighted-average contribution margin ratio?

b/ If the company’s fixed costs are 450,080 per year, what is the dollar amount of each type of candle that must be sold to break even?

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