Questions Problem 19-5 (Algorithmic) Mix and Break-Even Sales Data related to th
ID: 2460906 • Letter: Q
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Questions Problem 19-5 (Algorithmic) Mix and Break-Even Sales Data related to the expected sales of snowboards and skis for Winter Sports Inc. for the current year, which is typical of recent years, are as follows: Products Unit Selling Price Unit Variable Cost Sales Mix Snowboards estimated fixed costs for current year are $673,920. Required: Determine the estimated units of sales of the overall (total) product necessary to reach the break-even point for the current year. units Based on the break-even sales in units in part 1, determine the unit sales of both snowboards and skis for the current year. Snowboards: units Skis: units Assume that the sales mix was 60% snowboards and 40% skis. Determine the estimated units of sales of the overall product necessary to reach the break-even point for the current year. units Check My Work 0 - Icon KeyExplanation / Answer
Answer 1. At the break even point, the overall total contribution = overall Fixed cost .
So, contribution of snowboards = $210 -$140 = $70 per unit
and the contribution of skis = $560 - $260 = $300 per unit
Also, the sales mix is snowboards 40% and skis 60% and Fixe cost is estimated at $673,920
Total contribution (taking overall total units sale be X) = $70(X * 40%) + $300 (X * 60%)
Thus, break-even-point (in overall units sales) for the current year =
= $70(X * 40%) + $300 (X * 60%) = $ 673,920
=> X = 673.920 / 208 = 3240 units
Answer 2: On the basis of Answer 1, the units sales of snowboards in the current year is 3240 * 40%=1296 units
and the units sales of skis in the current year is 3240 * 60%=1944 units
Answer 3: Assume the sales mix was 60% snowboards and 40% skis,then the overall break-even-point sales in units are:
= $70(X * 60%) + $300 (X * 40%) = $ 673,920
=> X = 673.920 / 162 = 4160 units
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