# Acc280 Financial Accounting: P7-21 Boise Company manufactures and sells three products

Acc280 Financial Accounting

P7-21

Boise Company manufactures and sells three products: Good, Better, and Best. Annual fixed costs are $3,315,000, and data about the three products follows.

Good Better Best

Sales mix in units 30% 50% 20%

Selling Price 250 350 500

Variable cost 100 150 250

Required

a. Determine the weighted-average unit contribution margin.

b. Determine the break-even volume in units for each product.

C. Determine the total number of units that must be sold to obtain a profit for the company of $234,000.

D. Assume that the sales mix for Good, Better, and Best is changed to 50%, 30%, and 20% respectively. Will the number of units required to break-even increase or decrease?

P7-21

Boise Company manufactures and sells three products: Good, Better, and Best. Annual fixed costs are $3,315,000, and data about the three products follows.

Good Better Best

Sales mix in units 30% 50% 20%

Selling Price 250 350 500

Variable cost 100 150 250

Required

a. Determine the weighted-average unit contribution margin.

b. Determine the break-even volume in units for each product.

C. Determine the total number of units that must be sold to obtain a profit for the company of $234,000.

D. Assume that the sales mix for Good, Better, and Best is changed to 50%, 30%, and 20% respectively. Will the number of units required to break-even increase or decrease?

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