EXERCISE 6: Mark Wilson is considering renting a vending booth at a local mall for the holiday season. Mark intends to sell 3 products: candy, nuts and cookies. The Fixed Cost to rent the booth for the entire season is $27,900. Mark also anticipates the products to sell in a ratio of 5 candy, 3 nuts and 2 cookies (5:3:2), known as the sales mix. Calculate the total number of products that Mark needs to sell to break even Step 1 of 3: Calculate a weighted-average unit contribution margin: Nuts Cookies Total Sale price per unit $2.50 $3.00 $3.00 Less: Variable cost per unit ($1.00) ($1.00) ($2.00) Contribution margin per unit Sales mix in units (ratio) Contribution Margin Weighted Avg CM per Unit Step 2 of 3: Utilize the weighted-average contribution margin to calculate the Breakeven point in units: Fixed Costs IWeighted Avg UCM- Breakeven in Units Step 3 of 3: Using the Sales Mix and the Breakeven Point in Units, calculate the number of each product type that would need to be sold to break even: Units by Breakeven Units Candy 5/10 or 50% /10 or 2,10 or 20% Total As you can see in this problem, it would likely be very difficult to sell this many units in a shortened holiday season. This is precisely why such an analysis is necessary