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In: Accounting

E19.9 (LO 2) Tiger Golf Accessories sells golf shoes, gloves, and a laser-guided range-finder that measures...

E19.9 (LO 2) Tiger Golf Accessories sells golf shoes, gloves, and a laser-guided range-finder that measures distance. Shown below are unit cost and sales data.

Compute break-even point in units for a company with multiple products.

   Pairs of
Shoes
   Pairs of
Gloves
   Range-
Finder
Unit sales price    $100    $30    $260
Unit variable costs   60  10  200
Unit contribution margin $ 40 $20 $ 60
Sales mix 35% 55% 10%

Fixed costs are $620,000.

Instructions

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

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

c. Verify that the mix of sales units determined in (b) will generate a zero net income.

Solutions

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