Question

Sales Mix and Break-Even Sales Dragon Sports Inc. manufactures and sells two products, baseball bats and...

Sales Mix and Break-Even Sales

Dragon Sports Inc. manufactures and sells two products, baseball bats and baseball gloves. The fixed costs are \$477,000, and the sales mix is 60% bats and 40% gloves. The unit selling price and the unit variable cost for each product are as follows:

 Products Unit Selling Price Unit Variable Cost Bats \$60 \$50 Gloves 150 90

a. Compute the break-even sales (units) for the overall enterprise product, E.
units

b. How many units of each product, baseball bats and baseball gloves, would be sold at the break-even point?

 Baseball bats units Baseball gloves units

 Baseball bats Baseball gloves Sales mix(a) 60% 40% Selling price per unit \$60 \$150 Less: Variable cost per unit \$50 \$90 Contribution margin per unit(b) \$10 \$60 (a)×(b) \$6 \$24 Combined Contribution per unit \$30(\$6+\$24)

A. Break-even sales (in units) for the overall Product E

= Fixed cost / Combined Contribution per unit

=\$477,000/\$30

=15,900 units

B.

Baseball bats (15,900×60%) =9,540 units

Baseball gloves (15,900×40%)=6,360 units

______×______

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