Sales Mix and Break-Even SalesNorthwest Technology Inc. manufactures and sells two products, digital game players and computer tablets. The fixed costs are $546,000, and the sales mix is 70% gameplayers and 30% computer tablets. The unit selling price and the unit variable cost for each product are as follows:ProductsUnit Selling PriceUnit Variable CostGame playersTablets$70180$50110a. Compute the break-even sales (units) for the overall product, E.unitsb. How many units of each product, game players and tablets, would be sold at the break-even point?Digital game playersComputer tabletsunitsunits

Variable costs are costs that varies with the change in the level of output whereas fixed costs are…

Answered: Sales Mix and Break-Even Sales…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Sales Mix and Break-Even Sales Sports Inc. manufactures and sells two products, baseball bats and baseball gloves. The fixed costs are $1,008,000, and the sales mix is 20% bats and 80% gloves. The unit selling price and the unit variable cost for each product are as Dragon follows: Unit Selling Price $70 180 a. Compute the break-even sales (units) for the overall enterprise product, E. units Products Unit Variable Cost Bats Gloves $50 110 b. How many units of each product, baseball bats and baseball gloves, would be sold at the break-even point? Baseball bats units Baseball gloves units
Morris Industries manufactures and sells three products (AA, BB, and CC). The sales price and unit variable cost for the three products are as follows: Sales Price Variable Cost Product per Unit per Unit $30 AA $50 BB 35 10 CC 25 15 Their sales mix is reflected as a ratio of 5:3:2. Annual fixed costs shared by the three products are $253,500 per year. A. What are total variable costs for Morris with their current product mix? Total variable costs $ B. Calculate the number of units of each product that will need to be sold in order for Morris to break even. Number of Units per Product AA BB C. What is their break-even point in sales dollars? Break-even point in sales $ D. Using an income statement format, prove that this is the break-even point. If an amount is zero, enter "0". Income Statement Sales Product AA Product BB Product CC Total Sales Variable Costs Product AA Product BB Product CC Total Variable Costs $ Contribution Margin Fixed Costs Net Income
Morris Industries manufactures and sells three products (AA, BB, and CC). The sales price and unit variable cost for the three products are as follows: Morris Industries data Product Sales Price per Unit Variable Cost per Unit AA $42 $34 BB 64 38 CC 81 47 Their sales mix is reflected as a ratio of 10:1:2. Annual fixed costs shared by the three products are $330,092 per year. What is their break-even point in sales dollars? Do not round until submitting your final answer. Round to the whole dollar, no decimals.
Morris Industries manufactures and sells three products (AA, BB, and CC). The sales price and unit variable cost for the three products are as follows: Product Sales Priceper Unit Variable Costper Unit AA $45 $30 BB 35 10 CC 35 5 Their sales mix is reflected as a ratio of 5:3:2. Annual fixed costs shared by the three products are $189,000 per year. A. What are total variable costs for Morris with their current product mix? Total variable costs $fill in the blank b16d34fd6fb7fb3_1 B. Calculate the number of units of each product that will need to be sold in order for Morris to break even. Number ofUnits per Product AA fill in the blank BB fill in the blank CC fill in the blank C. What is their break-even point in sales dollars? Break-even point in sales $fill in the blank
Sales Mix and Break-Even Analysis Quality Containers Industries Inc. has fixed costs of $368,000. The unit selling price, variable cost per unit, and contribution margin per unit for the company's two products follow: Product Selling Price Variable Cost per Unit Contribution Margin per Unit AA $125 $85 $40 BB 90 40 50 The sales mix for Products AA and BB is 40% and 60%, respectively. Determine the break-even point in units of AA and BB. a. Product AA units b. Product BB units
Sales Mix and Break-Even Sales Home Run Sports Inc. manufactures and sells two products, baseball bats and baseball gloves. The fixed costs are $464,000, and the sales mix is 80% bats and 20% gloves. The unit selling price and the unit variable cost for each product are as follows: Products Unit Selling Price Unit Variable Cost Bats $80 $60 Gloves 200 120 a. Compute the break-even sales (units) for the overall product, E.fill in the blank 1 units b. How many units of each product, baseball bats and baseball gloves, would be sold at the break-even point? Baseball bats fill in the blank 2 units Baseball gloves fill in the blank 3 units
Sales Mix and Break-Even Sales Data related to the expected sales of laptops and tablets for Tech Products Inc. for the current year, which is typical of recent years, are as follows: Products Unit Selling Price Unit Variable Cost Sales Mix Laptops $1,200 $600 40% Tablets 700 350 60% The estimated fixed costs for the current year are $4,500,000. Required: 1. Determine the estimated units of sales of the overall (total) product, E, necessary to reach the break-even point for the current year. units 2. Based on the break-even sales (units) in part (1), determine the unit sales of both laptops and tablets for the current year. Laptops units Tablets units 3. Assume that the sales mix was 60% laptops and 40% tablets. Compare the break-even point with that in part (1). Why is it so different? units The break-even point is lower in this scenario than in part (1) because the sales mix is weighted more heavily toward the product with the higher contribution margin per unit of product.
Krispies Ltd manufactures and sells three products which have the following revenue and costs per unit: Snap Crackle Pop R R Selling price per unit 15 20 12 Variable cost per unit 10 13 6 Fixed cost per unit Unit fixed costs are based on the following sales volumes: Snap -– 15 000 units Crackle – 12 000 units Pop – 30 000 units Required: Calculate the aggregate break-even units and sales for Krispies Ltd. Round to two decimals.
Sales Mix and Break-Even Sales Data related to the expected sales of laptops and tablets for Tech Products Inc. for the current year, which is typical of recent years, are as follows: Products Unit Selling Price Unit Variable Cost Sales Mix Laptops $200 $140 20% Tablets 450 210 80% The estimated fixed costs for the current year are $195,840. Required: 1. Determine the estimated units of sales of the overall (total) product, E, necessary to reach the break-even point for the current year. units 2. Based on the break-even sales (units) in part (1), determine the unit sales of both laptops and tablets for the current year. Laptops: units Tablets: units 3. Assume that the sales mix was 80% laptops and 20% tablets. Determine the estimated units of sales of the overall product necessary to reach the break-even point for the current year. units
Sales Mix and Break-Even Sales Data related to the expected sales of laptops and tablets for Tech Products Inc. for the current year, which is typical of recent years, are as follows: Products Unit Selling Price Unit Variable Cost Sales Mix Laptops $1,600 $800 40% Tablets 900 450 60% The estimated fixed costs for the current year are $11,682,000. Required: 1. Determine the estimated units of sales of the overall (total) product, E, necessary to reach the break-even point for the current year.fill in the blank 1 units 2. Based on the break-even sales (units) in part (1), determine the unit sales of both laptops and tablets for the current year. Laptops fill in the blank 2 units Tablets fill in the blank 3 units 3. Assume that the sales mix was 60% laptops and 40% tablets. Compare the break-even point with that in part (1). Why is it so different?fill in the blank 4 units The break-even point is in this scenario than in part (1) because the sales mix is…
Island Novelties, Incorporated, of Palau makes two products-Hawaiian Fantasy and Tahitian Joy. Each product's selling price, variable expense per unit and annual sales volume are as follows: Selling price per unit Variable expense per unit Number of units sold annually Fixed expenses total $652,800 per year. Hawaiian Fantasy $ 30 $21 30,000 Tahitian Joy $ 100 $ 25 6,000 Required: 1. Assuming the sales mix given above, do the following: a. Prepare a contribution format income statement showing both dollar and percent columns for each product and for the company as a whole. b. Compute the company's break-even point in dollar sales. Also, compute its margin of safety in dollars and its margin of safety percentage. 2. The company has developed a new product called Samoan Delight that sells for $30 each and that has variable expenses of $18 per unit. If the company can sell 12,500 units of Samoan Delight without incurring any additional fixed expenses: a. Prepare a revised contribution…
Island Novelties, Incorporated, of Palau makes two products-Hawaiian Fantasy and Tahitian Joy. Each product's selling price, variable expense per unit and annual sales volume are as follows: Hawaiian Fantasy Tahitian Joy Selling price per unit $ 12 $ 120 Variable expense per unit $9 $ 48 Number of units sold annually 36,000 5,400 Fixed expenses total $ 437,000 per year. Required: 1. Assuming the sales mix given above, do the following: a. Prepare a contribution format income statement showing both dollar and percent columns for each product and for the company as a whole. b. Compute the company's break - even point in dollar sales. Also, compute its margin of safety in dollars and its margin of safety percentage. 2. The company has developed a new product called Samoan Delight that sells for $45 each and that has variable expenses of $27 per unit. If the company can sell 12,000 units of Samoan Delight without incurring any additional fixed expenses: a. Prepare a revised contribution…

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