Sales Mix and Break-Even Sales Sports Inc. manufactures and sells two products, baseball bats and baseball gloves. The fixed costs are $1,008,000, and the sales mix is 20% bats and 80% gloves. The unit selling price and the unit variable cost for each product are as Dragon follows: Products Unit Selling Price $70 180 Gloves a. Compute the break-even sales (units) for the overall enterprise product, E. units Bats Unit Variable Cost $50 110 b. How many units of each product, baseball bats and baseball gloves, would be sold at the break-even point? Baseball bats units Baseball gloves units
Sales Mix and Break-Even Sales Sports Inc. manufactures and sells two products, baseball bats and baseball gloves. The fixed costs are $1,008,000, and the sales mix is 20% bats and 80% gloves. The unit selling price and the unit variable cost for each product are as Dragon follows: Products Unit Selling Price $70 180 Gloves a. Compute the break-even sales (units) for the overall enterprise product, E. units Bats Unit Variable Cost $50 110 b. How many units of each product, baseball bats and baseball gloves, would be sold at the break-even point? Baseball bats units Baseball gloves units
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Expert Solution
Step 1
When a firm manufactures more than one product, a problem arises as to which product mix yield maximum product. Marginal costing helps the management in selecting the best sales mix. Weighted average contribution margin is used to calculate break even point in case of sales mix.
Contribution margin = Sales - variable cost
Break even point (units) of the overall enterprise = Fixed cost/ Weighted average contribution margin
Step by step
Solved in 3 steps
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education