Financial & Managerial Accounting
13th Edition
ISBN: 9781285866307
Author: Carl Warren, James M. Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Question
Chapter 19, Problem 19.21EX
A.
To determine
Sales mix: It refers to the relative distribution of the total sales among the number of products sold by a company. In other words, it is expressed as a percentage of units sold for each product with respect to the total units sold for all the products.
Break-even Point: It refers to a point in the level of operations at which a company experiences its revenues generated is equal to its costs incurred. Thus, when a company reaches at its break-even point, it reports neither an income nor a loss from operations. The formula to calculate the break-even point in sales units is as follows:
the break-even point in sales units for the overall Product E.
B.
To determine
the break-even sales (units) for Product-Bats and Product-Gloves.
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Sales Mix and Break-Even Sales
Dragon Sports Inc. manufactures and sells two products, baseball bats and baseball gloves. The fixed costs are $452,600, and the sales mix is 30% bats and 70% gloves. The unit selling price and the unit variable cost for each product are as follows:
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a. Compute the break-even sales (units) for the overall enterprise product, E.__________ units
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