problem 14 pe ofassignmentld- 600355 CengageNowv2 | Online teaching and learning
ID: 2577376 • Letter: P
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problem 14
pe ofassignmentld- 600355 CengageNowv2 | Online teaching and learning resource from Cengage Learning in this scenario than in part (1) because the sales mix is toward the product with the higher product 14. EX.19-21 ALGO (Algorithmic) Sales Mix and Break-Even Sales Dragon Sports Inc. manufactures and sells two products, baseball bats and baseball gloves. The fixed costs are $533,400 and the unit variable cost for each product are as follows Products Unit Selling Price Unit Variable Cost Bats Gloves , and the sales mix is 20% bats and 80% gloves. The unit selling price $50 $40 130 80 a. Compute the bre sales (units) for the overall enterprise product, E How many units of each product, baseball bats and baseball ploves, would be sold at the break even point? units 15, EX.19-13 ALGO (Algorithmic) 11/20 2017Explanation / Answer
14.
a.
Unit contribution margin for Bats = Unit selling price - Unit variable cost
= 50 - 40 = 10
Unit contribution margin for Gloves = Unit selling price - Unit variable cost
= 130 - 80 = 50
Weighted average unit contribution margin = (Bats contribution margin in units * Sales mix) + (Gloves contribution margin * Sales mix)
= (10*20%) + (50*80%)
= 42
Breakeven units for the overall enterprise = Fixed costs / Weighted average unit contribution margin
= 533,400 / 42
= 12,700 units.
b.
Baseball bats = 12,700 * 20% = 2,540 units.
Baseball gloves = 12,700 * 80% = 10,160 units.
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