Question

Sales Mix and Break-Even Sales

Data related to the expected sales of kayaks and canoes for River Sports Inc. for the current year, which is typical of recent years, are as follows:

Products	Unit Selling Price		Unit Variable Cost		Sales Mix
Kayaks	$270		$180		40%
Canoes	360		170		60%

The estimated fixed costs for the current year are $390,000.

Instructions:

1. Determine the estimated units of sales of the overall product necessary to reach the break-even point for the current year.
units

2. Based on the break-even sales (units) in part (1), determine the unit sales of both kayaks and canoes for the current year.

Kayaks	units
Canoes	units

3. Assume that the sales mix was 60% Kayaks and 40% canoes. Determine the estimated units of sales of the overall product necessary to reach the break-even point for the current year.
units

4. Based upon the break-even sales (units) in part (3), determine the unit sales of kayaks and Canoes for the current year.

Kayaks	units
Canoes	units

Answer 1

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