Question

Dragon Sports Inc. manufactures and sells two products, baseball bats and baseball gloves. The fixed costs are $254,800, and the sales mix is 40% bats and 60% gloves. The unit selling price and the unit variable cost for each product are as follows: Products Unit Selling Price Unit Variable Cost Bats $40 $30 Gloves 100 60 a. Compute the break-even sales (units) for the overall enterprise product, E. units b. How many units of each product, baseball bats and baseball gloves, would be sold at the break-even point

Answer 1

a)Break-even sales in units= 9,100 units

b)The number of units of each products:

Bat= 3,640 units

Gloves= 5,460 units

Step-by-step explanation:

The break-even sales in unit = total general fixed cost/Average contribution per unit

Average contribution per unit = (40%× (40-30) )+ (60%×(100-60) )=28

Break-even Sales = $254,800/$28=9100 units

Break-even sales in units= 9,100 units

The number of units of each products:

Bat = 40%×9100 =3,640 units

Gloves = 60%× 9,100 =5,460 units

Bat= 3,640 units

Gloves= 5,460 units

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