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Graded Homework - Chapter 20 PR.20.05A.ALGO Sales Mix and Break-Even Sales Data related to the expected sales of laptops and tablets for Tech Products Inc. for the current year, which is typical of recent years, are as follows:

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Data related to the expected sales of laptops and tablets for Tech Products Inc. for the current year, which is typical of recent years, are as follows:

ProductsUnit Selling PriceUnit Variable CostSales Mix
Laptops$1,600
$800
40%
Tablets900
450
60%

The estimated fixed costs for the current year are $11,682,000.

Required:

1.  Determine the estimated units of sales of the overall (total) product, E, necessary to reach the break-even point for the current year.
 units (ANSWER: 19,800)

2.  Based on the break-even sales (units) in part (1), determine the unit sales of both laptops and tablets for the current year.

Laptops units (ANSWER: 7,920)
Tablets units (ANSWER: 11,880)

3.  Assume that the sales mix was 60% laptops and 40% tablets. Compare the break-even point with that in part (1). Why is it so different?
 units (ANSWER: 17,700)

The break-even point is lower  in this scenario than in part (1) because the sales mix is weighted more heavily  toward the product with the higher contribution margin per unit  of product.


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