PR 21-5A Sales mix and break-even sales OBJ. 5 Data related to the expected sales of laptops and tablets for Tech Products Inc. for the current year, which is typical of recent years, are as follows: Products Laptops Tablets The estimated fixed costs for the current year are $2,498,600. Unit Selling Price $1,600 850 Unit Variable Cost $800 350 3. Sales Mix 40% 60% Instructions 1. Determine the estimated units of sales of the overall (total) product, E, necessary to reach the break-even point for the current year. 2. Based on the break-even sales (units) in part (1), determine the unit sales of both laptops and tablets for the current year. Assume that the sales mix was 50% laptops and 50% tablets. Compare the break-even point with that in part (1). Why is it so different?
PR 21-5A Sales mix and break-even sales OBJ. 5 Data related to the expected sales of laptops and tablets for Tech Products Inc. for the current year, which is typical of recent years, are as follows: Products Laptops Tablets The estimated fixed costs for the current year are $2,498,600. Unit Selling Price $1,600 850 Unit Variable Cost $800 350 3. Sales Mix 40% 60% Instructions 1. Determine the estimated units of sales of the overall (total) product, E, necessary to reach the break-even point for the current year. 2. Based on the break-even sales (units) in part (1), determine the unit sales of both laptops and tablets for the current year. Assume that the sales mix was 50% laptops and 50% tablets. Compare the break-even point with that in part (1). Why is it so different?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Please read instructions on Image 1, and please answer questions on page 2.
thanks for your time!
Expert Solution
Step 1 Introduction
The break even sales are the sales where business earns no profit no loss during the period. The break even sales are calculated as fixed cost divided by contribution margin.
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