Please help, what are the answers to this question? Sales Mix and Break-Even Sal
ID: 2438872 • Letter: P
Question
Please help, what are the answers to this question?
Sales Mix and Break-Even Sales
Dragon Sports Inc. manufactures and sells two products, baseball bats and baseball gloves. The fixed costs are $262,400, and the sales mix is 80% bats and 20% gloves. The unit selling price and the unit variable cost for each product are as follows:
a. Compute the break-even sales (units) for both products combined.
units
b. How many units of each product, baseball bats and baseball gloves, would be sold at break-even point?
Products Unit Selling Price Unit Variable Cost Bats $40 $30 Gloves 100 60Explanation / Answer
1 Breakeven point Weighted Average Selling Price = Selling Price of Bat*Sales percentage of Bat + Selling Price of Gloves*Sales percentage of Gloves = $40*80% + $100*20% 52 Weighted Average Variable Cost = Variable Cost of Bat*Sales percentage of Bat + Variable Cost of Gloves*Sales percentage of Gloves = $30*80% + $60*20% 36 Breakeven Point = Total Fixed Expense/ (Weighted Average Selling Price - Weighted Average Variable Cost) = $262400/($52-$36) 16400 unit 2 No of units to be sold at Breakeven Bats = Breakeven units*Sales Percentage = 16400*80% 13120 units Gloves = Breakeven units*Sales Percentage = 16400*20% 3280 units