1. Geitner Sports inc. manufactures and sells two products, baseball bats and ba

Question

1. Geitner Sports inc. manufactures and sells two products, baseball bats and baseball gloves. The fixed costs are $460,000 and the sales mix is 60% bats and 40% gloves. The units selling price and the unit variable cost for each product are as follows: Products Unit Selling Price Unit variable Cost Bats $100.00 $ 75.00 Gloves $80.00 $60.00 A. Compute the break-evensales (units) for the overall product B. How many units of each product, baseball bats and baseball gloves, would be sold at the break even point?

Explanation / Answer

Contribution margin for Bats: 100 - 75 = $25 Contribution margin for Gloves: 80 - 60 = $20 (A) Contribution per mix = 25 x 0.6 + 20 x 0.4 = $23 Breakeven point = 460000/23 = 20,000 units (in overall) (B) For Baseball bats: 20000 x 0.6 = 12000 units For Gloves: 20000 x 0.4 = 8000 units Hope this helps!

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