Oxford Company makes two products. The budgeted per-unit contribution margin for each product follows: Oxford expects to

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Oxford Company makes two products. The budgeted per-unit for each product follows:
Oxford expects to incur fixed costs of $390,000. The relative sales mix of the products is 75 percent for Deluxe and 25 percent for Luxury.
Deluxe Luxury
Sales price $40 $80
Variable cost per unit 24 50
per unit $16 $30
Required
a. Determine the total number of products (units of Deluxe and Luxury combined) Oxford must sell to break even.
b. How many units each of Deluxe and Luxury must Oxford sell to break even?
Contribution Margin
Contribution margin is an important element of cost volume profit analysis that managers carry out to assess the maximum number of units that are required to be at the breakeven point. Contribution margin is the profit before fixed cost and taxes...

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a Weightedaverage contribution margin Deluxe 16 x 75 1200 ...View the full answer

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