Pairs of Shoes Pairs of Gloves Range Finder 60 10 200 $40 $20 $50 40% 50% 10% Fi
ID: 2385806 • Letter: P
Question
Pairs
of Shoes
Pairs
of Gloves
Range
Finder
60
10
200
$40
$20
$50
40%
50%
10%
Fixed costs are $620,000.
Tiger Golf Accessories sells golf shoes, gloves, and a laser-guided range-finder that measures distance. Shown below are unit cost and sales data.Pairs
of Shoes
Pairs
of Gloves
Range
Finder
Unit variable costs
60
10
200
Unit contribution margin
$40
$20
$50
Sales mix
40%
50%
10%
Fixed costs are $620,000.
Tiger Golf Accessories sells golf shoes, gloves, and a laser guided range - finder that measures distance. Shown below are unit cost and sales data. Determine the number of units to be sold at the break - even point for each product line. Compute the break - even point in units for the company.
Explanation / Answer
HI, First we need how many units total this company is pushing. So, you've already been given the fixed costs at 620k. Then we need the weighted average contribution margin. Take all three products' unit contribution and multiply it by the percentage (.XX) Then add all three dollar amounts you get. Now you have a number to divide by your total cost. You should get 20,000 units. Try it and make sure I'm right. (I'm right, but work through it anyway!) Now for the break even of each product line, take the sales mix percentage (.XX) of each product and multiply it by the total units sold (our 20,000 from part A). DONE !! Not so bad right? Nice work. { You should be getting 8,000, 10,000 and 2,000 }
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