Question

Sales Mix and Break-Even Sales

Dragon Sports Inc. manufactures and sells two products, baseball bats and baseball gloves. The fixed costs are \$471,200, and the sales mix is 70% bats and 30% gloves. The unit selling price and the unit variable cost for each product are as follows:

 Products Unit Selling Price Unit Variable Cost Bats \$80 \$60 Gloves 200 120

a. Compute the break-even sales (units) for the overall enterprise product, E.
units

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

Contribution per unit = sales - variable cost

Bats=80*70% -60*30% =38

Gloves = 200*70% - 120*30% =104

Contribution = 104 - 38 =66

Break even sales = fixed cost / contribution

=471200/66 = 7139.3939

b)sold at break even point

Baseball bats = 7139.39*70% = 4997.57

Gloves =7139.39*30% = 2141.817

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