### International Printer Machines and GEM Limited

Question 1 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: Calculate the weighted average unit contribution margin, assuming a constant sales mix. How many units of each printer must be sold to break even? i) Explain what is margin of safety ii) Calculate in sales units the margin…

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