In: Accounting
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 | $1,000 | $500 | 40% | |||
Tablets | 600 | 300 | 60% |
The estimated fixed costs for the current year are $1,596,000.
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. Compare the break-even point with that in part
(1). Why is it so different?
units