Fred's Paper Shop frequently buys paper from Online Office Supplies, Inc. Online Office Supplies and Fred's Paper Shop decide to
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Answer:
ratio = 7 : 3
Weighted average contribution ratio = 37 %
break-even point = $800,000
sales level = $560,000
Sales level = $240,000
Explanation:
Solution
we know here that contribution margin for computer is express as
contribution margin for computer =
contribution margin for computer = 40%
and
Contribution margin for VG Systems is =
Contribution margin for VG Systems is = 30%
so
ratio = (40 + 30 ) : 30 = 7 : 3
and
Weighted average contribution margin ratio are here
Weighted average contribution ratio = 40% × 0.7 + 30% × 0.3
Weighted average contribution ratio = 37 %
and
break even point in dollars are
break-even point =
break-even point = $800,000
and
sales level are here
sales level for computer = 800000 × 70%
sales level = $560,000
and
Sales level for VG systems: 800000 × 30%
Sales level = $240,000