Question

Can someone please show me how to solve this problem?

THanks so much!

Cherry Blossom Products Inc. produces and sells yoga-training products: how-to DVDs and a basic equipment set (blocks, strap, and small pillows). Last year, Cherry Blossom Products sold 9,060 DVDs and 4,530 equipment sets. Information on the two products is as follows: Equipment Sets DVDs Price $7.70 $25.10 Variable cost per unit 3.70 14.70 Total fixed cost is $66,240. Required: 1. What is the sales mix of DVDs and equipment sets? 2. Compute the break-even quantity of each product.

Answer 1

The answer has been presented in the supporting sheet. All the parts has been solved with detailed explanation and format. For detailed answer refer to the supporting sheet.

Answer 2 Part 1) 3 Sales mix of DVD = dvd unit sales/ total unit sales*100 = 9060/(9060+4530) 5 = 2/3 or 66.67% 7 8 9 Sales mix of equipment sets = equipment sets unit sales/ total unit sales 100 = 4530/(9060+4530) = 1/3 or 33.33% 12 11 Thus the final answer DVD Equipment sets 13 Sales Mix 2/3 or 66.67% 1/3 or 33.33% 14 15 Part 2) 16 Firstly we have to calculate the weighted average contribution margin 17 = ((7.7-3.7)*2/3)+((25.1-14.7)*1/3) 18 = $6.1333 IY 20 Break even units = fixed cost/ weighted average contribution 21 = 66240/6.1333 22 = 10800 units 24 The Break even quantity for DVD = 10800*2/3 25 = 7200 Units 27 The Break even quantity for equipment = 10800*1/3 28 = 3600 Units 30 Break even quantity for DVD 31 The break even qty for equipment sets is 7200 3600