Determine how many of each plant stand Mikey needs to sell to breakeven. Begin by computing the​ weighted-average contribution margin per unit. First identify the formula​ labels, then complete the calculations step by step.

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Answer:

                                                twig stands               oak stands

sales price per unit                     $16                           $43

variable costs per unit                 $3                            $15

sales bundle = 4 twig stands + 1 oak stand

contribution margin per bundle = (4 x $13) + $28 = $80

contribution margin per unit = $80 / 5 = $16

total fixed costs = $400

break even point in units = $400 / $16 = 25 units

break even point in bundles = $400 / $80 = 5 bundles

  • 20 twig stands
  • 5 oak stands