Question

Sales Mix and Break-Even Sales

Dragon Sports Inc. manufactures and sells two products, baseball bats and baseball gloves. The fixed costs are $195,000, 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	$60		$50
Gloves	150		90

a. Compute the break-even sales (units) for the overall enterprise product, E.
fill in the blank 1 units

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

Baseball bats	fill in the blank
Baseball gloves	fill in the blank

Answer 1

			baseball bats	baseball gloves	Total
i	Sales price		60	150
ii	variable cost		50	90
iii=i-ii	Contribution margin		10	60
iv	mix		70%	30%
v=iii*iv	Contribution margin mix		$         7.00	$           18.00	$   25.00
Ans 1 =
	Fixed cost =	195,000
	Breakeven mix =	7,800
	195000/25
	ans =	7,800	units
Ans 2=
	Baseball bats=	7800*70%	5,460
	baseball gloves=	7800*30%	2,340