Question

Sales mix and break-even sales Dragon Sports Inc. manufactures and sells two products, baseball bats and baseball gloves. The fixed costs are $414,000, and the sales mix is 20% bats and 80% 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 $60 Gloves 100 55 This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below. Open spreadsheet 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

60 Selling price Per unit Variable Cost Per unit Contribution Margin Per unit Sales Mix : CM* sales mix Weighted Average Unit Contribution Fixed cost Bats gloves 60 100 55 45 20% 80% 0 36 36 414000 36 414000 Weighted Average Unit Contribution Fixed Cost Compute the Break Even point in Units Break Even in Unit Sales =( Fixed Cost / CM Per unit) Bats ( 11500*20%) Gloves ( 11500*80%) 11500 (Units) 2300 Units 9200 Units