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Chapter 10: Qn 12 Unlike in Problem 11, the Finch Convenience Store uses...

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Accounting

Chapter 10: Qn 12
Unlike in Problem 11, the Finch Convenience Store uses different markups for its range of different
products, resulting in the following contribution margin ratios per product category. Beverages
have a contribution margin ratio of 75%, non-perishable food 50%, hardware 40%, and magazines
30%. The usual sales mix as a percentage of sales is 40% beverages, 30% non-perishable food,
10% hardware, and 20% magazines. Fixed costs are $8,250 per month.
Required
Calculate the following:
(a) The weighted average contribution ratio
(b) The monthly break-even sales revenue for the convenience store
(c) The sales revenue for beverages, non-perishable food, hardware, and magazines to achieve
break-even sale
(d) The sales revenue needed to make an operating profit of $2,750 per months for the convenience
store
(e) The sales revenue needed for beverages, non-perishable food, hardware, and magazines to
achieve the operating profit of $2,750
Chapter 13, On 5
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