Question

Sales Mix and Break-Even Sales Dragon Sports Inc. manufactures and sells two products, baseball bats and baseball gloves. The fixed costs are $750,400, 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

Weighted-average unit contribution margin

= [(80-60)*40%] + [(200-120)*60%]

= 56

A) Breakeven units = Fixed cost/Weighted average unit contribution margin

= 750,400/56

= 13,400

B)

Baseball bat's = 13,400 * 40% = 5360

Baseball gloves = 13,400*60% = 8040