## Answers

Ans:

Calculation of weighted average contribution Margin per unit | |||

Plain | Flavored | Total | |

Selling price per box | $ 3.10 | $ 3.90 | |

Deduct : Variable cost per box | $ 0.40 | $ 2.70 | |

Contribution Margin per box | $ 2.70 | $ 1.20 | |

x Number of boxes sold | 1 | 4 | 5 |

Total Contribution Margin | $ 2.70 | $ 4.80 | $ 7.50 |

Weighted Average contribution Margin per unit | $ 1.50 | ||

[Total Contribution Margin / Total Boxes sold] |

Calculation of break even point in units | |||||

Break even point in boxes = Total Fixed cost / Weighted Average contribution Margin per unit | |||||

Break even point in boxes = $3360/ $1.50 = 2240 boxes | |||||

Number of boxes of Plain popcorn to be sold to break even = 2240 boxes x [1/5] = 448 boxes | |||||

Number of boxes of Flavored popcorn to be sold to break even = 2240 boxes x [4/5] = 1792 boxes | |||||

Popperl must sell 448 plain boxes and 1792 flavored boxes to break even. |

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