Marston Corporation produces three sets of souvenirs Matryohska dolls - Large, Medium, and Small. The sales...

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Marston Corporation produces three sets of souvenirs Matryohska dolls - Large, Medium, and Small. The sales departement forecasts a total sale of 260,000 units in the coming year including 26,000 units of large dolls, 130,000 units of medium dolls and 104,000 units of small dolls. Cost information concerning these products appear below: Selling price per unit Variable costs Material £10 Labor £12 The company's fixed costs for the period are £292,500. Required: a. b. Large C. d. Medium £25 £15 £8 £5 Calculate the weighted average contribution per unit (12 marks) Calculate the breakeven point in units in for the current sales mix (3 marks) Calculate the breakeven sales quantity for each type of products (6 marks) Calculate the breakeven point in sales pounds (4 marks) e. Assuming the same sales mix and no change in fixed costs level, how many units of each product should be produced and sold to earn a total profit of £154,700? (5 marks) Small £8 £4 £3 f. Demonstrate how the contribution to sales ratio can be used to calculate breakeven point in a multi-product business and apply to the above case (10 marks) Marston Corporation produces three sets of souvenirs Matryohska dolls - Large, Medium, and Small. The sales departement forecasts a total sale of 260,000 units in the coming year including 26,000 units of large dolls, 130,000 units of medium dolls and 104,000 units of small dolls. Cost information concerning these products appear below: Selling price per unit Variable costs Material £10 Labor £12 The company's fixed costs for the period are £292,500. Required: a. b. Large C. d. Medium £25 £15 £8 £5 Calculate the weighted average contribution per unit (12 marks) Calculate the breakeven point in units in for the current sales mix (3 marks) Calculate the breakeven sales quantity for each type of products (6 marks) Calculate the breakeven point in sales pounds (4 marks) e. Assuming the same sales mix and no change in fixed costs level, how many units of each product should be produced and sold to earn a total profit of £154,700? (5 marks) Small £8 £4 £3 f. Demonstrate how the contribution to sales ratio can be used to calculate breakeven point in a multi-product business and apply to the above case (10 marks)

Answer rating: 100% (QA)

Answer a Weighted Average Contribution per Unit To calculate the weighted average contribution per unit we need to first calculate the contribution per unit for each product The formula for contributi... View the full answer