Sales Mix and Break-Even Sales Dragon Sports Inc. manufactures and sells two pro

Question

Sales Mix and Break-Even Sales Dragon Sports Inc. manufactures and sells two products, baseball bats and baseball gloves. The fixed costs are $385,000, and the sales mix is 40% bats and 60% gloves. The unit selling price and the unit variable cost for each product are as follows: Products Unit Selling PriceUnit Variable Cost Bats Gloves a. Compute the brea-even sales (units) for the overall enterprise product, E $70 $50 180 110 units b. How many units of each product, baseball bats and baseball gloves, would be sold at the break-even point? Baseball bats Baseball gloves units units

Explanation / Answer

Particulars Bats Gloves Sales Price PU 70.00 180.00 Less: Variable Cost PU 50.00 110.00 A Contribution Margin PU 20.00 70.00 B Sales Mix 40% 60% A*B Weighted Average Margin 8.00 42.00 Total Weighted Average Contribution Margin 50.00 Fixed Costs 385000 a Break Even Sales in Units: Fixed Costs/W.Average CM 385000/50 7700 Units b Break Even Sales in Units: 7700 (BEP Units Total * Sales Mix) Products Sales Mix BEP Units Bats 40% 3080 Units Gloves 60% 4620 Units 7700

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