Montana Alta sells two products. Product A and Product B.

Product A Product B Total

Sales price $40 $50

Variable cost per unit 24 40

Total fixed costs $840,000

Sales price Product A $ 40 and Product B $ 50 Total Variable cost per unit Product A 24 and Product B 40 Total fixed costs $ 840,000

Required to:

a. What is the contribution margin in units and in percentages

b. What is the tie point in units for each of the products assuming that the "sales mix" is two to one? 2;1

c. Same as 2. above but the "sales mix is 3;2

d. How many units are necessary to sell if the company wants a net income of $ 73,500 after contributions at the rate of 30% with the relation of c.

Answer rating: 100% (QA)

a Contribution Margin CM Sales Price Variable Cost per Unit CM for Product ... View the full answer