Answer:
1. Option (e) is correct.
2. Option (e) is correct.
Explanation:
(a) Weighted-average unit contribution margin:
= (Unit selling price of plain - plain's variable cost) × 60% + (Unit selling price of fancy - fancy's variable cost) × 40%
= (20 - 12) × 60% + (35 - 24.50) × 40%
= $4.8 + $4.2
= $9
(b) Break even sales:
= Annual fixed expenses ÷ Weighted-average unit contribution margin
= 45,000 ÷ 9
= 5,000