Problem
Sales 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
|
$180
|
|
$120
|
|
40%
|
|
|
Skis
|
450
|
|
210
|
|
60%
|
|
The estimated fixed costs for the current year are $221,760.
Required:
1. Determine the estimated units of sales of the overall (total) product necessary to reach the break-even point for the current year.
2. Based on the break-even sales in units in part 1, determine the unit sales of both snowboards and skis for the current year.
3. 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.