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Concept Introduction:
Breakeven point for two products: Breakeven point is the level of output at which the sales is equal to the total cost and there is no profit or loss. Breakeven point in units for two products together is calculated with the help of following formulas:
Target sales: Target sale is sale beyond the breakeven level to earn a desired profit. Target sale for two products together is calculated with the help of following formulas:
Weighted Average Contribution Margin: Weighted Average Contribution Margin is calculated for two products with the help of following formula:
Contribution margin: Contribution margin is the difference between sales price and variable costs. It is calculated with the help of following formula:
1. To determine: Number of each type of scooters to be sold for breakeven
2. To determine: Number of each type of scooters to be sold for breakeven to earn a desired profit of $67,500
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Chapter 21 Solutions
MyLab Accounting with Pearson eText -- Access Card -- for Horngren's Accounting
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