Why is it necessary to calculate a weighted-average contribution margin ratio for a multiproduct company when calculating the break-even point for that company? Why can’t all of the products’ contribution margin ratios just be added together and averaged?
Answer to relevant QuestionsIs the contribution margin ratio of a grocery store likely to be higher or lower than that of a plastics manufacturer? Explain the difference in cost structure between a grocery store and a plastics manufacturer. How does ...Use the information from the Northern Cruiseline Data Set. a. Compute the operating leverage factor when Northern Cruiseline sells 12,000 dinner cruises. b. If volume increases by 10%, by what percentage will operating ...Owner Shan Lo is considering franchising her Happy Wok restaurant concept. She believes people will pay $5 for a large bowl of noodles. Variable costs are $1.50 a bowl. Lo estimates monthly fixed costs for franchisees at ...DeAnna Braun sells homemade knit scarves for $16 each at local craft shows. Her contribution margin ratio is 62.5%. Currently, the craft show entrance fees cost DeAnna $1,000 per year. The craft shows are raising their ...Mathieu Manufacturing had a 1.25 operating leverage factor when sales were $50,000. Mathieu Manufacturing’s contribution margin ratio was 20%. What were Mathieu Manufacturing’s fixed expenses?
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