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Sales Mix and Break-Even Sales Dragon Sports Inc. manufactures and sells two products, baseball bats and baseball gloves...

Sales Mix and Break-Even Sales

Dragon Sports Inc. manufactures and sells two products, baseball bats and baseball gloves. The fixed costs are $634,200, and the sales mix is 20% bats and 80% gloves. The unit selling price and the unit variable cost for each product are as follows:

Products Unit Selling Price Unit Variable Cost
Bats $50 $40
Gloves 130 80

a. Compute the break-even sales (units) for both products combined.
units

b. How many units of each product, baseball bats and baseball gloves, would be sold at break-even point?

Baseball bats units
Baseball gloves units
0 0
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Contribution margin=Sales-Variable cost

Contribution margin for:

Bats=(50-40)=$10 per unit

Gloves=(130-80)=$50 per unit

Weighted average Contribution margin=Respective Contribution margin*Respective sales mix

=(10*0.2)+(50*0.8)=$42 per unit

a.Overall breakeven=Fixed cost/Weighted Average Contribution margin

=634,200/42=15100 units

b.

Baseball bats(15100*20%) 3020 units
Baseball gloves(15100*80%) 12080 units.
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