ACCT 2101 Chapter : ACCT Chapter 6 Notes
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Sales mix usually assumes a constant sales mix. Use contribution margin approach and balloons as examples. Sales mix is the relative combination in which a company"s products are sold. Compute breakeven sales determine the weighted average unit contribution margin of products. Contribution margin b x # of units. Divide the total cm $ by the total # of units (or the individual product unit # sales by the overall total units of all products combined) to determine the weighted average contribution margin. Determine breakeven units by taking the total fixed. Cost and dividing it by the weighted average contribution margin (# 2 above) Take the breakeven units determined in # 3 above and allocate based on the proportionate ratio of the product mix. Calculate the total cm of product sales by multiplying amount of each product and the unit cm used in # 1 above.
