Tiger Golf accessories sells shoes, gloves and a laser guided range finder that

Question

Tiger Golf accessories sells shoes, gloves and a laser guided range finder that measures distance . Shown are the unit cost and sales data:
pairs of shoes pairs of gloves range finder
unit sales price 110 50 240
unit variable cost 60 20 220
unit contribution margin 50 30 20
sales mix 30% 40% 30%

Fixed cost are 608190.

Compute the break even point in units for the company(round computation for weighted average contribution margin to 2 decimal places e.g.10.50,and the final answer to 0 decimal placese.g.125.

Determine the number of units to be sold at break even point for each product line.

shoes
gloves
range finders

Explanation / Answer

In order for the company to break even, their contribution margin needs to equal their fixed costs. Given this sales mix, we are going to need to find the break even point for each individual product.

Take the fixed cost and multiply it by the portion of the sales mix for each product.

Shoes
(608190)(.3) = 50x
182,457 = 50x
x = 3,649.14 units

Gloves
(608190)(.4) = 30y
243,276 = 30y
y = 8,109.20 units

Finders
(608190)(.3) = 20z
182,457 = 20z
z = 9,122.85 units

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