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Dixie Candle Supply makes candles. The sales mix (as a percentage of total dollar sales) of its three product lines

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Dixie Candle Supply makes candles. The sales mix (as a percentage of total dollar sales) of its three product lines is birthday candles 30%, standard tapered candles 50%, and large scented candles 20%. The contribution margin ratio of each candle type is shown below.
Candle Type contribution margin Ratio
Birthday......................... 20%
Standard tapered............... 30%
Large scented.................. 45%
(a) What is the weighted - average contribution margin ratio?
(b) if the company's fixed cost are $450,000 per year, what is the dollar amount of each type of candle that must be sold 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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Managerial Accounting Tools for Business Decision Making

Managerial Accounting Tools for Business Decision Making

ISBN: 978-1119036432

7th edition

Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso

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Question Posted: August 12, 2016 11:13:40
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