Shotz Corporation sells three products: J, K, and L. The following information was taken from a recent budget:

Total fixed costs are anticipated to be $2,450,000.
A. Determine Shotz's sales mix.
B. Determine the weighted-average contribution margin.
C. Calculate the number of units of J, K, and L that must be sold to break even.
D. If Shotz desires to increase company profitability, should it attempt to increase or decrease the sales of product K relative to those of J and L? Briefly explain.

Question

Shotz Corporation sells three products: J, K, and L. The following information was taken from a recent budget:
  
Total fixed costs are anticipated to be $2,450,000. 
A. Determine Shotz's sales mix.
B. Determine the weighted-average contribution margin.
C. Calculate the number of units of J, K, and L that must be sold to break even.
D. If Shotz desires to increase company profitability, should it attempt to increase or decrease the sales of product K relative to those of J and L? Briefly explain.

Quizplus · Accepted Answer

The Answer of Shotz Corporation sells three products: J, K, and L. The following information was taken from a recent budget:
  
Total fixed costs are anticipated to be $2,450,000. 
A. Determine Shotz's sales mix.
B. Determine the weighted-average contribution margin.
C. Calculate the number of units of J, K, and L that must be sold to break even.
D. If Shotz desires to increase company profitability, should it attempt to increase or decrease the sales of product K relative to those of J and L? Briefly explain.

Shotz Corporation Sells Three Products: J, K, and L