Question

Dixie Candle Supply makes candles. The sales mix (as a percentage of total dollar sales) of its three product lines is birthday candles 30%, standard tapered candles 50%, and large scented candles 20%. The contribution margin ratio of each candle type is shown below.

Answer 1

Answer:

Information is missing, so I looked for a similar question:

Candle Type

Contribution           Margin Ratio

Birthday                  20%

Standard tapered  30%

Large scented  45%

the weighted average contribution margin ratio = (0.30 x 20%) + (0.50 x 30%) + (0.20 x 45%) = 30%

if the fixed costs = $450,000, its break even point in dollars = $450,000 / 30% = $1,500,000

• Birthday                  $450,000
• Standard tapered  $750,000
• Large scented  $300,000