Fletcher Company has three products with the following characteristics:
$\begin{array} { | l | r | r | r | }
\hline & \text { Product A } & \text { Product B } & \text { Product C } \
\hline \begin{array} { l }
\text { Monthly sales in } \
\text { dollars }
\end{array} & \$ 60,000 & \$ 80,000 & \$ 100,000 \
\hline \begin{array} { l }
\text { Contribution margin } \
\text { ratio }
\end{array} & 20 \% & 40 \% & 16 \% \
\hline
\end{array}$Fixed Costs = $30,000 per month.

-If Total sales next month are $330,000 and Fletchers sales mix remains unchanged,the total sales for product C will be closest to:
A) $100,000.
B) $110,000.
C) $82,500.
D) $137,500.

Question

Fletcher Company has three products with the following characteristics:
$\begin{array} { | l | r | r | r | } 
\hline & \text { Product A } & \text { Product B } & \text { Product C } \
\hline \begin{array} { l } 
\text { Monthly sales in } \
\text { dollars }
\end{array} & \$ 60,000 & \$ 80,000 & \$ 100,000 \
\hline \begin{array} { l } 
\text { Contribution margin } \
\text { ratio }
\end{array} & 20 \% & 40 \% & 16 \% \
\hline
\end{array}$Fixed Costs = $30,000 per month.

-If Total sales next month are $330,000 and Fletchers sales mix remains unchanged,the total sales for product C will be closest to:
A) $100,000.
B) $110,000.
C) $82,500.
D) $137,500.

Quizplus · Accepted Answer

To find the total sales for Product C when total sales are $330,000 with the sales mix remaining unchanged, we first determine the current total sales and the proportion of each product in the total sales. The current total sales are $60,000 (Product A) + $80,000 (Product B) + $100,000 (Product C) = $240,000. Product C's proportion of total sales is $100,000 / $240,000 = 41.67%. Applying this proportion to the new total sales of $330,000, Product C's sales would be 41.67% of $330,000, which is approximately $137,500.

Fletcher Company Has Three Products with the Following Characteristics Fixed Costs = $30,000 Per Month