Sales Mix and Break-Even Sales 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 Unit Selling Price Unit Variable Cost Sales Mix Laptops $1,200 $600 40% Tablets 700 350 60% The estimated fixed costs for the current year are $2,250,000. Required: Determine the estimated units of sales of the overall (total) product, E, necessary to reach the break-even point for the current year. _____units Based on the break-even sales (units) in part (1), determine the unit sales of both laptops and tablets for the current year. Laptops _______units Tablets _______units Assume that the sales mix was 60% laptops and 40% tablets. Compare the break-even point with that in part (1). Why is it so different? _____units
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
Sales Mix and Break-Even Sales
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 |
Unit Selling Price |
Unit Variable Cost |
Sales Mix |
|||
|
Laptops |
$1,200 |
|
$600 |
|
40% |
|
|
Tablets |
700 |
|
350 |
|
60% |
|
The estimated fixed costs for the current year are $2,250,000.
Required:
Determine the estimated units of sales of the overall (total) product, E, necessary to reach the break-even point for the current year.
_____units
Based on the break-even sales (units) in part (1), determine the unit sales of both laptops and tablets for the current year.
|
Laptops |
_______units |
|
Tablets |
_______units |
Assume that the sales mix was 60% laptops and 40% tablets. Compare the break-even point with that in part (1). Why is it so different?
_____units
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