Question

Tiger Golf Accessories sells golf shoes, gloves, and a laser-guided range-finder that measures distance. Shown below are unit cost and sales data.

		Pairs of Shoes			Pairs of Gloves			Range- Finder
Unit sales price		$105			$33			$242
Unit variable costs		58			10			205
Unit contribution margin		$47			$23			$37
Sales mix		32	%		44	%		24	%

Fixed costs are $653,568.

Incorrect answer iconYour answer is incorrect.

Calculate weighted-average unit contribution margin. (Round answer to 2 decimal places e.g. 10.25.)

Weighted-average unit contribution margin

$

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Incorrect answer iconYour answer is incorrect.

Compute the break-even point in units for the company.

Break-even point

units

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Incorrect answer iconYour answer is incorrect.

Determine the number of units to be sold at the break-even point for each product line.

Shoes
Gloves
Range Finders

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Answer 1

Answer -

1. Answer -

Weighted-average unit contribution margin = $34.04

Calculation:

Weighted-average unit contribution margin:

= (Unit contribution margin of Shoes * Sales mix of Shoes) + (Unit contribution margin of Gloves * Sales mix of Gloves) + (Unit contribution margin of Range-finders * Sales mix of Range-finders)

= ($47 * 32%) + ($23 * 44%) + ($37 * 24%)

= $15.04 + $10.12 + $8.88

= $34.04

2. Answer -

Break-even point in units = 19,200 units

Calculation:

Break-even point in units:

= Fixed costs / Weighted-average unit contribution margin

= $653,568 / $34.04

= 19,200 units

3. Answer -

The number of units to be sold at the break-even point for each product line:

Shoes	6,144 units
Gloves	8,448 units
Range finders	4,608 units

Calculation:

Shoes:

Break-even point in units:

= Break-even point in units for the company * Sales mix of Shoes

= 19,200 units * 32%

= 6,144 units

Gloves:

Break-even point in units:

= Break-even point in units for the company * Sales mix of Gloves

= 19,200 units * 44%

= 8,448 units

Range finders:

Break-even point in units:

= Break-even point in units for the company * Sales mix of Range finders

= 19,200 units * 24%

= 4,608 units