Trusted by Students Everywhere
Why Choose Us?
0% AI Guarantee
Human-written only.
24/7 Support
Anytime, anywhere.
Plagiarism Free
100% Original.
Expert Tutors
Masters & PhDs.
100% Confidential
Your privacy matters.
On-Time Delivery
Never miss a deadline.
Wagner Enterprise sells two products, large tractors and small tractors
Wagner Enterprise sells two products, large tractors and small tractors. A large tractor sells for $62,000 per unit with variable costs of $28,520 per unit. Small tractors sell for $34,000 per unit with variable costs of $16,320 per unit. Total fixed costs for the company are $1,560,000. Wagner Enterprises typically sells two large tractors for every three small tractors. Assuming the sales mix remains constant, how many large and small tractors are sold (in units) at Wagner's break-even point?
Expert Solution
| Computation of Weighted Average Contribution Margin: | ||||
| Large Tractor | Small tractor | Total | ||
| A | Price | 62000 | 34000 | |
| B | Variable Cost per unit | 28520 | 16320 | |
| C = A - B | Contribution Margin | 33480 | 17680 | |
| D | Product Mix (2/5; 3/5) | 40.00% | 60.00% | 100.00% |
| E = C * D | Weighted Average Contribution Margin | 13392 | 10608 | 24000 |
| Computation of Number of Large and Small Tractors Sold at Wagner's Break-even Point: | ||
| A | Total Fixed Cost plus profit | 1560000 |
| B | Weighted Average Contribution Margin | 24000 |
| C = A/B | Multi Product Break Even point | 65 |
| C * 40% | Large Tractor | 26 |
| C * 60% | Small tractor | 39 |
Archived Solution
Unlocked Solution
You have full access to this solution. To save a copy with all formatting and attachments, use the button below.
Already a member? Sign In
Important Note:
This solution is from our archive and has been purchased by others. Submitting it as-is may trigger plagiarism detection. Use it for reference only.
For ready-to-submit work, please order a fresh solution below.
For ready-to-submit work, please order a fresh solution below.
Or get 100% fresh solution
Get Custom Quote
