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3 years ago

EB13.

Business

1 answer:

damaskus [11]3 years ago

3 0

Answer:

Product Selling price Unit variable cost

$ $

Trunk switch 60 28

Gas door switch 75 33

Glove box light 40 22

175 83

Composite contribution margin

= Composite selling price - Composite unit variable cost

= $175 - $83

= $92

Composite contribution margin ratio

= Composite contribution margin

Composite selling price

= $92

$175

= 0.525714285

Composite break-even point in dollars

= Fixed cost

Composite contribution margin ratio

= $18,840

0.525714285

= $35,837

Explanation:

In this case, there is need to add all the selling prices to obtain composite selling price. We also need to add all the unit variable costs to derive composite unit variable cost.

Composite contribution equals composite selling price minus composite unit variable cost.

Composite contribution margin ratio is the ratio of composite contribution to composite selling price.

Composite break-even point in dollars equal fixed cost divided by composite contribution margin ratio.

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