Question: Part 1: Based on the data presented in the Spreadsheet Template below (CM Breakeven tab): Calculate the contribution margin (CM) for each of the three
Part 1: Based on the data presented in the Spreadsheet Template below (CM Breakeven tab):
- Calculate the contribution margin (CM) for each of the three products sold at the cookie business.
- Calculate the weighted average CM.
- Calculate the breakeven point.
Discuss the results based on your calculations as far as which type of cookie you think is the most profitable, which has the highest CM, etc.
| Cookie Business | ||||
| Chocolate Chip | Sugar | Specialty | Total | |
| Units Sold | 1,500,000 | 980,000 | 300,000 | 2,780,000 |
| Sales | $ 1,875,000.00 | $ 882,000.00 | $ 1,050,000.00 | $ 3,807,000.00 |
| Less: Variable Costs | $ 690,000.00 | $ 205,800.00 | $ 81,000.00 | $ 976,800.00 |
| Contribution Margin | $ 1,185,000.00 | $ 676,200.00 | $ 969,000.00 | $ 2,830,200.00 |
| Less: Common Fixed Costs | $ 125,000.00 | |||
| Profit | $ 2,705,200.00 | |||
| Per item Contribution Margin | ||||
| Weighted Average Contribution Margin | ||||
| Break-even point in units | ||||
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