Multiproduct, Contribution Margin. National Tennis Racquet Co. produces and sells three models: Smasher Basher Dinner Total Units
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Multiproduct, Contribution Margin. National Tennis Racquet Co. produces and sells three models:
| Smasher | Basher | Dinner | Total | |
|---|---|---|---|---|
| Units Sold | 1,000 | 2,000 | 2,000 | 5,000 |
| Sales | $100,000 | $120,000 | $80,000 | $300,000 |
| Fewer variable costs | 50,000 | 48,000 | 24,000 | 122,000 |
| Contribution margin | 50,000 | 72,000 | 56,000 | 178,000 |
| Less common fixed costs | 103,000 | |||
| Profit | $75,000 |
a. What is the weighted average contribution margin per unit?
b. Calculate the break-even point in units assuming the current mix.
c. What would be the number of Smashers, Bashers, and Dinkers in the break-even level of sales?
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