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Question(s) / Instruction(s):

Presto Candle Supply makes candles. The sales mix (as a percent of total dollar sales) of its three product lines is: birthday candles 25%, standard tapered candles 50%, and large scented candles 25%. The contribution margin ratio of each candle type is as follows.

Candle Type                         Contribution Margin Ratio

Birthday                                              11%        

Standard tapered                            21%       

Large scented                                  44%         

Required:

(a)          What is the weighted-average contribution margin ratio?

(b)          If the company's fixed costs are $429,225 per year, what is the dollar amount of each type of candle that must be sold to break even?

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