Question

Data related to the expected sales of laptops and tablets for Tech Products Inc. for the current year, which is typical of recent years, are as follows:

Products

Laptops Tablets

Unit Selling Price

$1,600 850

Unit Variable Cost

$800 350

Sales Mix

40% 60%

The estimated fixed costs for the current year are $2,498,600.

Instructions

1. 2. 3.

Determine the estimated units of sales of the overall (total) product, E, necessary to reach the break-even point for the current year.

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

Assume that the sales mix was 50% laptops and 50% tablets. Compare the break-even point with that in part (1). Why is it so different?

Answer 1

1) Sale of overall product

    40%*1600 + 60%*850 = 40%x*800 + 60%x*350+2,498,600

    40%x*800 + 60%x500=2,498,600

    320x+300x = 2,498,600

     640x = 2,498,600

      x = 4030

2) Break even Sale of Laptop and Tablet

Laptop (4030 x 40%) = 1,612 units

Tablets (4030 x 60%) = 2,418 units

3) Total product break even sales in units

     50%x * 1600 + 50%x * 850 = 50%x * 800 + 50%x*350 + 2,498,600

     50%x * 800+ 50%x * 500 = 2,498,600

     400x+250x = 2,498,600

     650x = 2,498,600

     x = 3844