Question

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	$180		$120		40%
Tablets	370		170		60%

The estimated fixed costs for the current year are $167,040.

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 higher/lower in this scenario than in part (1) because the sales mix is weighted more/less heavily toward the product with the higher/lower contribution margin per unit of product.

Answer 1