Kooi Papery makes cards for special occasions. The sales mix (as a percent of total dollar sales) of its three product fines is: birthday cards 40%, thank you cards 35%, and wedding cards 25%. The contribution margin ratio of each card type is shown below:
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Contribution Margin Ratio |
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Birthday |
20% |
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Thank you |
30% |
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Wedding |
25% |
(a) What is the weighted average contribution margin ratio?
(b) If the company”s fixed costs are $297,000 per year: what is the dollar amount of each type of card that must be sold to break even?
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