Sheridan Company sells two types of soccer jerseys: Deluxe and Superior. The following table shows the sales price ar costs for each jersey. Sheridan Company incurs 184,000 a year in fixed costs. Assume the store has a sales mix of thre for every Superior jersey sold. Туре Sales Price Variable Cost Contribution Margin Deluxe $18.00 $14.00 $4.00 Superior 26.00 18.00 8.00
Sheridan Company sells two types of soccer jerseys: Deluxe and Superior. The following table shows the sales price ar costs for each jersey. Sheridan Company incurs 184,000 a year in fixed costs. Assume the store has a sales mix of thre for every Superior jersey sold. Туре Sales Price Variable Cost Contribution Margin Deluxe $18.00 $14.00 $4.00 Superior 26.00 18.00 8.00
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Sheridan Company sells two types of soccer jerseys: Deluxe and Superior. The following table shows the sales price and unit variable
costs for each jersey. Sheridan Company incurs 184,000 a year in fixed costs. Assume the store has a sales mix of three Deluxe jerseys
for every Superior jersey sold.
Туре
Sales Price
Variable Cost
Contribution Margin
Deluxe
$18.00
$14.00
$4.00
Superior
26.00
18.00
8.00
(a)
Your answer is incorrect.
How many jerseys of each type will be sold at the breakeven point? (Round answers to 0 decimal places, e.g. 25,000.)
Deluxe
Superior
Expert Solution
Step 1
The break-even point (BEP) is an accounting term referring to the point at which a company's revenues and expenses equal each other during a given accounting period. It denotes that the company had no net profits or losses – it had "broken even." BEP can also refer to the revenues required to cover the expenses incurred during a specific period.
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