Question

Henry Timepieces manufactures two styles of watches— the Digital and the Classic. The following data pertain to the Digital:

Variable manufacturing cost.................................................................................. $ 120
Variable operating cost......................................................................................... $ 50
Sale price............................................................................................................... $ 250

The company’s monthly fixed expenses total $ 200,000. When Digitals and Classics are sold in the mix of 8:2, respectively, the sale of 2,200 total watches results in an operating income of $ 75,000. Compute the contribution margin per watch for the Classic.



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  • CreatedAugust 27, 2014
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