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 $302,600, 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 Price Unit Variable Cost Bats Gloves a. Compute the break-even sales (units) for the overall enterprise product, E. $50 130 $40 80 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

Contribution margin=Sales-Variable costs

Contribution margin for Bats=(50-40)=$10

Contribution margin for Gloves=(130-80)=$50

Hence weighted average Contribution margin=(10*0.4)+(50*0.6)=34

Hence a.Breakeven=Fixed cost/Contribution margin

=(302600/34)=8900 units

b.Baseball bats=(8900*40%)=3560 units

Baseball gloves=(8900*60%)=5340 units.

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.