Question: what is the contribution margin ratio for all three models combined? Blue Mountain Black Diamond Bunny Hill $ 500,000 Sales 400,000 100,000 85,000 275,000 260,000

what is the contribution margin ratio for all three models combined?
what is the contribution margin ratio for all three models combined? Blue

Blue Mountain Black Diamond Bunny Hill $ 500,000 Sales 400,000 100,000 85,000 275,000 260,000 225,000 140.000 15,000 Variable Expenses Contribution Margin Fixed Expenses - Common Fixed Expenses - Unique 100,000 80,000 20,000 5,000 15,000 7,500 $ $ Net Income $ 110,000 52,500 (10,000) Fixed expenses consist of $200,000 of common costs allocated to the three products based on relative sales, and additional fixed expenses of $15,000 (Bunny Hill). $7,500 (Blue Mountain), $5,000 (Black Diamond). The common costs will be incurred regardless of how many models are produced. The other fixed expenses would be eliminated if a model is phased out. Sean White, an executive with the company, feels the Black Diamond line should be discontinued to increase the company's net income

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!