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 \$256,000, 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:

 Products Unit Selling Price Unit Variable Cost Bats \$40 \$30 Gloves 100 60

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

 Bats Gloves A Contribution margin per unit \$10 \$40 B Sales Mix 80% 20% C = A x B Weighted Contribution margin \$8 \$8
 D Fixed Cost \$256,000 E = 8+8 Weighted Contribution margin \$16 F = D/E Total Break Even units 16,000

[a] Break even = 16,000 units

[b]
Baseball bats = 16000 x 80% = 12,800 units
Baseball gloves = 16000 x 20% = 3,200 units