Question

Sales Mix and Break-Even Sales

Dragon Sports Inc. manufactures and sells two products, baseball bats and baseball gloves. The fixed costs are $502,200, and the sales mix is 30% bats and 70% 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 the overall enterprise product, E.
units

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

Baseball bats	units
Baseball gloves	units

Answer 1

Contribution margin=Sales-Variable cost

	Contribution margin
Bats	(80-60)=$20
Gloves	(200-120)=$80

Weighted average Contribution margin=Respective Contribution margin*Respective sales mix

=(20*0.3)+(80*0.7)=62

1.Overall breakeven=Fixed cost/Weighted average Contribution margin

=(502200/62)=8100 units

2.

Baseball bats(8100*30%)	2430 units
Baseball gloves(8100*70%)	5670 units