In: Accounting
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.