Question

Dragon Sports Inc. manufactures and sells two products, baseball bats and baseball gloves. The fixed costs are $616,000, and the sales mix is 40% bats and 60% 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 |

Answer #1

**Answer :-**

**a. Computation of the break-even sales(units) for both
products combined:-**

**Contribution Margin = Sales price -Variable
cost**

**Weighted Average Contribution Margin = ($80-$60)*40%
+($200-$120)*60%**

**Weighted Average Contribution Margin = $56**

**Break-even sales(units) = Fixed cost / Weighted Average
Contribution Margin**

**Break-even sales(units) = $616,000/$56**

**Break-even sales(units) = 11,000 units**

**b. Baseball bats = 11,000*40% = 4,400 Units**

**Baseball gloves = 11,000*60% = 6,600 units**

**If you have any query ask in comment section. If you
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