Exercise 19-9 Tiger Golf Accessories sells golf shoes, gloves, and a laser-guide

Question

Exercise 19-9 Tiger Golf Accessories sells golf shoes, gloves, and a laser-guided range-finder that measures distance. Shown below are unit cost and sales data Pairs of Pairs of Gloves Range Shoes $105 62 $43 Finder $241 201 $40 $30 Unit sales price Unit variable costs Unit contribution margin Sales mix $19 33 % 44 % 23 % Fixed costs are $584,200 Calculate weighted-average unit contribution margin. (Round answer to 2 decimal places e.g. 10.25.) Weighted-average unit contribution margin Compute the break-even point in units for the company Break-even point Determine the number of units to be sold at the break-even point for each product line Shoes Gloves units

Explanation / Answer

1.weighted average unit contribution margin =sum of [unit conribution margin * sales mix ] of all products.

=> [$43 *33%] + [$19*44%] + [$40*23%]

=>$14.19 + $8.36 +$9.20

=>$31.75.

weighted average unit contribution margin = $31.75.

2nd part:

Break even point in units for the company:

fixed costs / weighted average unit contribution margin

=>$584,200 / $31.75

=>18,400 units.

3rd part

number of units for each product line at break even point:

shoes (18,400*33%) 6,072 gloves (18,400 * 44%) 8,096 range finder (18,400*23%) 4,232

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