Sales Mix and Break-Even Sales New Wave Technology Inc. manufactures and sells t

Question

Sales Mix and Break-Even Sales New Wave Technology Inc. manufactures and sells two products, MP3 players and satellite radios. The fixed costs are $172,900, and the sales mix is 70% MP3 players and 30% satellite radios. The unit selling price and the unit variable cost for each product are as follows Products MP3 players Satellite radios a. Compute the break-even sales (units) for the overall product, E Unit Selling Price Unit Variable Cost $40 $30 100 60 units b. How many units of each product, MP3 players and satellite radios, would be sold at the break-even point? MP3 players Satellite radios units units

Explanation / Answer

Weighted average unit contribution margin=(40-30)*70%+(100-60)*30%= $19 a Brea even sales = 172900/19= 9100 b MP 3 player 6370 =9100*70% Satellite radios 2730 =9100*30%

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