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

FINANCIAL ACCOUNTING
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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:
Unit Selling Price
$70
180
a. Compute the break-even sales (units) for the overall enterprise product, E.
units
Products
Unit Variable Cost
Bats
Gloves
$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
Transcribed Image Text: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: Unit Selling Price $70 180 a. Compute the break-even sales (units) for the overall enterprise product, E. units Products Unit Variable Cost Bats Gloves $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
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 

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