Answered: ragon Sports Inc. manufactures and…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Dragon Sports Inc. manufactures and sells two products, baseball bats and baseball gloves. The fixed costs are $695,200, and the sales mix is 60% bats and 40% gloves. The unit selling price and the unit variable cost for each product are as follows:

Products	Unit Selling Price	Unit Variable Cost
Bats	$90		$40
Gloves	115		80

This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below.

Open spreadsheet

Compute the break-even sales (units) for the overall enterprise product, E.

fill in the blank 2 units
How many units of each product, baseball bats and baseball gloves, would be sold at the break-even point?

Baseball bats: fill in the blank 3 units

Baseball gloves: fill in the blank 4 units

Expert Solution

Step 1

$B r e a k e v e n S a l e s = \frac{F i x e d \cos t}{W e i g h t e d c o n t r i b u t i o n p e r u n i t}$

$W e i g h t e d c o n t r i b u t i o n p e r u n i t : - (S a l e s p r i c e p e r u n i t - V a r i a b l e \cos t p e r u n i t) x S a l e s m i x p e r p r o d u c t$