Question

I'll rate do all parts

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	$280		$190		40%
Tablets	410		190		60%

The estimated fixed costs for the current year are $238,560.

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. Determine the estimated units of sales of the overall product necessary to reach the break-even point for the current year.
units

Why is it so different?

The break-even point is in this scenario than in part (1) because the sales mix is weighted heavily toward the product with the contribution margin per unit of product.

Answer 1

Let us compute unit contribution of both Laptop and Tablet each one together
Sales :                          ($280 × 40%) + ($410 × 60%) = $ 358
Less: Variable cost             ($190× 40%) + ($190× 60%) =    $190
Unit contribution margin = $358-$190 = $ 168
Break-even sales = Fixed Costs / Unit Contribution Margin

1.Total Product break even sales in units

$238,560. / 168 = 1420 units

2. Break even sales in units Both Laptop and Tablet

Laptop (1420x 40%) =568 units
Tablet:(1420 x 60%) =852 units

3. Let us compute unit contribution of both Laptop and Tablet each one together
Sales :                          ($280 × 60%) + ($410 × 40%) = $ 332
Less: Variable cost             ($190× 60%) + ($190× 40%) =    $190
Unit contribution margin = $358-$190 = $ 142

Break-even sales = Fixed Costs / Unit Contribution Margin

3.1.Total Product break even sales in units

$238,560. / 142 = 1680 units

3.2. Break even sales in units Both Laptop and Tablet

Laptop (1680x 40%) =672 units
Tablet:(1680 x 60%) =1008 units

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