Sales Mix and Break-Even SalesHome Run Sports Inc. manufactures and sells two products, baseball bats and baseball gloves. The fixed costs are $464,000, and the sales mix is 80% bats and 20% gloves. The unit selling price and the unit variable cost for each product are as follows:ProductsUnit Selling PriceUnit Variable CostBats$80 $60 Gloves200 120 a. Compute the break-even sales (units) for the overall product, E.fill in the blank 1 unitsb. How many units of each product, baseball bats and baseball gloves, would be sold at the break-even point?Baseball batsfill in the blank 2 unitsBaseball glovesfill in the blank 3 units

BREAKEVEN POINTBreak Even means the volume of production or sales where there is no profit or loss.In other words, Break Even Point is the volume of production or sales where total costs are equal to revenue.Breakeven Point in Units= Fixed Cost ÷ Contribution Margin Per Unit BatsGloves TotalSelling Price $80.00$200.00Less :— Variable Cost Per Unit $60.00$120.00I) Contribution Margin $20.00$80.00II) Sales Mix80%20%Weighted Average Contribution Margin $16.00$16.00$32.00I) Breakeven Point of Sales := Fixed Cost ÷ Weighted Average Contribution Margin= $464,000 ÷ $32.00= 14,500Breakeven Point Sales MixIndividual BEPABA * BBats14,50080%11,600Gloves 14,50020%2,900REQUIREMENT # :— FINAL ANSWERREQUIREMENT #1 :— Break-even sales (units) for the overall product14,500UnitsREQUIREMENT #2 :— Individual BEPBats11,600Gloves 2,900

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Sales Mix and Break-Even Sales

Home Run Sports Inc. manufactures and sells two products, baseball bats and baseball gloves. The fixed costs are $464,000, and the sales mix is 80% bats and 20% gloves. The unit selling price and the unit variable cost for each product are as follows: