Programmer Executive Total
560,000$ 1,200,000$ 1,760,000$ PX
240,000 480,000 720,000$ VX
320,000$ 720,000$ 1,040,000$ (P-V)X
Correct! Correct! 819,000 F
221,000$ Profit
Correct!
Weights: Programmer Total Percentage
Sales Sales Weight
8,000 20,000 40%
Correct!
Executive Total Percentage
Sales Sales Weight
12,000 20,000 60%
Compute the weighted average contribution margin
ON-THE-GO, INC.
Problem 03-63
Requirement a:
Requirement b:
Requirement c:
Weighted
Contribution New Average
Margin Weight CM
Programmer 40$ 90% 36$
Executive 60$ 10% 6
Weighted-average Contribution Margin 42$
Correct!
Compute breakeven:
Fixed Cost
Cont. Margin
Breakeven
819,000 42 19,500 total units
Correct!
Total Breakeven
Breakeven Weight per case
Programmer Executive
70$ 100$
30$ 40$
Total company fixed costs for the year
Expected sales (bags) per year
Given Data P03-63:
ON-THE-GO, INC.
Variable cost per bag
Selling price per bag
Selling Price
CM
Weight per Case per Case per Case
Variety 1 40% 3$ 2$ 1$
Variety 2 35% 5 3 2
Variety 3 25% 10 6 4
Weighted average Revenue 5.45$ «- Correct!
Weighted average CM 2.10$ «- Correct!
Weighted average CM % 38.5321% «- Correct!
Fixed cost
Cont. Margin
Breakeven
46,200$ 38.5321% 119,900$
Correct!
Requirement b: Compute revenue required to pay 35% tax
40,950$ 0.65 63,000$
Fixed cost Average Breakeven
+ Net Income
OCEAN KING PRODUCTS
Problem 03-67
Requirement a: Compute weighted-average contribution margin
Selling Price Variable Cost Fixed Cost
per Case per Case per Month
Variety 1 3$ 2$ –
Variety 2 5 3 –
Variety 3 10 6 –
Entire Firm – – 46,200$
Sales
Variety 1 40%
OCEAN KING PRODUCTS
Given Data P03-67: