Ryan's Landscaping sells a quality brand of hoes, shovels, and rakes in a sales mix of 2:4:2.

Question:

Ryan's Landscaping sells a quality brand of hoes, shovels, and rakes in a sales mix of 2:4:2. The company's fixed costs are $61,600. Product data include the following:

Unit Sales Price Unit Variable Costs $12 $8 Hoes Shovels 15 16 Rakes

a. Compute the weighted-average contribution margin
b. Determine the weighted-average breakeven point
c. Calculate the breakeven point for each product.
d. Determine the breakeven point in sales dollars.

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...