Durdon Snowboards sells two models of snowboards: the Men’s Dominator and the Ladies’ Luxury. Information on the two models of snowboards follows

Durdon Snowboards sells two models of snowboards: the Men’s Dominator and the Ladies’ Luxury. Information on the two models of snowboards follows:

Of Durdon’s total sales, 70% are for the Men’s Dominator model. The company’s annual fixed costs are $180,000.

Required

1. Compute the unit contribution margin for each model of snowboard.

2. Compute the weighted-average contribution margin assuming a constant sales mix.

3. If the company’s target operating income is $115,000, how many units of each model of snowboard must be sold to achieve the company’s goals?

SOLUTION

1.