Question

Sales Mix and Break-Even Sales 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 Sales Mix Laptops Unit Selling Price $1,000 600 Unit Variable Cost $500 300 40% Tablets 60% The estimated fixed costs for the current year are $1,596,000. Required: 1. Determine the estimated units of sales of the overall (total) product, E, necessary to reach the break-even point for the current year. units 2. Based on the break-even sales (units) in part (1), determine the unit sales of both laptops and tablets for the current year. Laptops units Tablets units 3. Assume that the sales mix was 60% laptops and 40% tablets. Compare the break-even point with that in part (1). Why is it so different? units The break-even point is in this scenario than in part (1) because the sales mix is toward the product with the higher of product.

Answer 1

Answer 6 break even point & continbention per product mix - 61000-500)x0.4) +(600-700)x0.6) =(500x0.4) + (300X0-6) 300 + 180 - 380 break even point = fixed cost contribution por emix 1,596,000 380 . = 4200 units. Laptops = 4.200 x0.4 : = 1680 | Laptops = 1680 units) Tablets = 4200 X:0.6 = 2520 Lii Tablets=2530

☺ contribution por revised production = (500x0.6)+ (70o yo.nl - 1050 1,596.000 break Even point = ? 1050 * 1520 Differente. = 4200 - 1520 2680 units - 3680 Limits The break-even point is lower in this scenario than in part @ because the sales mix is wighted more heavily towards the product, with the sugher contri bection margin por unit of product,