BUSS244
CVP Analysis
1. The KS Company Private Limited manufactures three products. Information concerning the three product lines for the month under review is as follows:
Products A B C
Unit selling price $80 $120 $200
Sales Mix (in units) 1 2 1
Total Variable costs: $30 $50 $80
Manufacturing $10 $25 $45
Marketing $10 $5 $10
Administrative $5 $5 $5
Others $70 $120 $240
Total $50
Fixed costs:
Manufacturing (allocated) $1,200,000
Marketing (allocated) $200,000
Administrative (allocated) $120,000
Others $80,000
Total $1,600,000
1. The contribution margin per unit of product:
A. $120 (20 - 70/50)
B. $70 ($60 - $50)
C. $55
D. $50
2. The weighted-average contribution margin:
A. $240 (Unit CM)
B. $210
C. $160 (30 x 0.1 + 50 x 0.2 + 80 x 0.1)
D. $86.5 ($52.5 + 0.3 + 0.1 + 0.8 = 2.1 = 210)
E.
Unit CM
A. 15,238 units
B. 9,000 units
C. 7,620 units
D. 4,500 units
E. 3,750 units