Sales Mix and Break-Even SalesDragon Sports Inc. manufactures and sells two products, baseball bats and baseball gloves. The fixed costs are $319,300, 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:ProductsUnit Selling PriceUnit Variable Cost$40$30BatsGloves10060a. Compute the break-even sales (units) for both products combined.31,930 X unitsb. How many units of each product, baseball bats and baseball gloves, would be sold at break-even point?9,579 X unitsBaseball bats22,351 X unitsBaseball gloves

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Asked Jul 20, 2019
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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 $319,300, 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:
Products
Unit Selling Price
Unit Variable Cost
$40
$30
Bats
Gloves
100
60
a. Compute the break-even sales (units) for both products combined.
31,930 X units
b. How many units of each product, baseball bats and baseball gloves, would be sold at break-even point?
9,579 X units
Baseball bats
22,351 X units
Baseball 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 $319,300, 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: Products Unit Selling Price Unit Variable Cost $40 $30 Bats Gloves 100 60 a. Compute the break-even sales (units) for both products combined. 31,930 X units b. How many units of each product, baseball bats and baseball gloves, would be sold at break-even point? 9,579 X units Baseball bats 22,351 X units Baseball gloves

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Expert Answer

Step 1

Break-even sales:

 

Break-even sales is that level of sales at which there is no profit or no loss on the sale of goods because the firm can cover only its expenses and earns zero profits.

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Formula to calculate break-even sales is as follows: Fixed costs Break-even sales = Contribution margin per unit

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Step 2

(a)

Working note:

Thus, the overall contribution margin is $31.

 

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Calculation of overall contribution margin Bats: Contribution margin per unit Selling price per unit- Variable cost per unit - $40- $ 30 Contribution margin per unit x Sales mix Overall contribution margin =(S10x30%)+($40x 70%) -$10 = $3+$28 = $31 Calculation of break-even sales in units: Gloves Fixed cost Break-even sales Selling price per unit - Variable cost per unit Contribution margin per unit Overall contribution margin per unit = $100- $60 $319,300 = $40 $31 =10,300 units The breakeven point is 10,300 in sales.

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Step 3

(b)

 

The breakeven point is 3,090 in sales.

 

 

The breakeven point is...

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Calculation of break-even sales in units: Bats: Break-even sales = Total break-even units x Sale mix 10,300 unitsx 30% 3,090 units Gloves: Break-even sales = Total break-even units x Sale mix 10,300 unitsx70% 7,210 units

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