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 \$319,200, and the sales mix is 70% bats and 30% gloves. The unit selling price and the unit variable cost for each product are as follows: Products Unit Selling Price Unit Variable Cost Bats \$80 \$60 Gloves 200 120 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? Baseball bats units Baseball gloves units

 Bats Gloves Selling Price per unit \$80 \$200 Less : Variable cost per unit \$60 \$120 Contribution per unit \$20 \$80 Sales Mix 70% 30% Contribution x Sales Mix \$14 \$24 Combined Contribution per unit \$38

(a)Break-even sales (units) for both products combined

= Fixed Costs / Combined Contribution per unit

= \$3,19,200 / \$38 per unit

= 8,400 Units

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

Baseball bats = 5,880 Units [ 8,400 x 70% ]

Baseball gloves = 2,520 Units [ 8,400 Units x 30% ]

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