Transcribed Image Text: International Printer Machines (IPM) builds three computer printer models: Alpha, Beta, and Gamma. Information for these three products is as follows: Alpha

Transcribed Image Text: International Printer Machines (IPM) builds three computer printer models: Alpha, Beta, and
Gamma. Information for these three products is as follows:
Alpha
Beta
Gamma
Total
Selling price per unit
$250
$400
$1 500
Variable cost per unit
$80
$200
$800
Expected unit sales (annual) 12,000
6,000
2,000
20,000
Sales mix
50 percent 40 percent 10 percent 100 percent
Total annual fixed costs are $5,000,000. Assume the sales mix remains the same at all levels
of sales.
Required:
a) Calculate the weighted average unit contribution margin, assuming a constant sales mix.
b) How many units of each printer must be sold to break even?
c) ) Explain what is margin of safety.
i) Calculate in sales units the margin of safety for IPM, assuming projected sales are
25,000 units?

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