Figure 4-5.Standlar Company makes wireless speakers. The standard model price is $360 and variable expenses are $210. The deluxe model price is $500 and variable expenses are $300. The superior model price is $1,600 and variable expense per unit is $600. Total fixed expenses are $300,000. Generally, Standlar sells 8 standard models and 4 deluxe models for every superior model sold.
-Using the sales mix stated in the facts from Figure 4-5 to form a package, what is the total package contribution margin?

Question

Quizplus · Accepted Answer

To find the total package contribution margin, we need to calculate the contribution margin for each model and then multiply it by the number of units sold in the sales mix:

Standard model contribution margin = price - variable expenses = $360 - $210 = $150
Deluxe model contribution margin = price - variable expenses = $500 - $300 = $200
Superior model contribution margin = price - variable expenses = $1,600 - $600 = $1,000

Using the sales mix provided, we have:
- 8 standard models
- 4 deluxe models
- 1 superior model

Total contribution margin = (8 x $150) + (4 x $200) + (1 x $1,000) = $1,200 + $800 + $1,000 = $3,000

Therefore, the answer is choice C.