6 Dragon Sports Inc manufactures and sells two products, baseball bats and baseball gloves The fixed costs are $377,400, and the sales mix is 20 bats and 80 gloves The unit selling price and the unit variable cost for each product are as follows Products Unit Selling Price Unit Variable Cost Bats $40 $30 Gloves 100 60 a Compute the break even sales (units) for both products combined units b How many units of each product, baseball bats and baseball gloves, would be sold at the break even point Baseball bats units Baseball gloves units 7 Break Even Sales and Sales Mix for a Service Company Zero Turbulence Airline provides air transportation services between Los Angeles, California and Kona, Hawaii A single Los Angeles to Kona round trip flight has the following operating statistics Fuel $15,200 Flight crew salaries 11,642 Airplane depreciation 5,498 Variable cost per passengerbusiness class 65 Variable cost per passengereconomy class 50 Round trip ticket pricebusiness class 575 Round trip ticket priceeconomy class 320 It is assumed that the fuel, crew salaries, and airplane depreciation are fixed, regardless of the number of seats sold for the round trip flight If required round the answers to nearest whole number a Compute the break even number of seats sold on a single round trip flight for the overall product, E Assume that the overall product is 10 business class and 90 economy class seats Total number of seats at break even seats b How many business class and economy class seats would be sold at the break even point Business class seats at break even seats Economy class seats at break even seats 8 Margin of Safety a If Canace Company, with a break even point at $518,400 of sales, has actual sales of $810,000, what is the margin of safety expressed (1) in dollars and (2) as a percentage of sales Round the percentage to the nearest whole number 1 $ 291,600 2 36 b If the margin of safety for Canace Company was 45 , fixed costs were $1,871,100, and variable costs were 55 of sales, what was the amount of actual sales (dollars) ( Hint Determine the break even in sales dollars first ) $

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6. Dragon Sports Inc. manufactures and sells two products, baseball bats and baseball gloves. The fixed costs are $377,400, and the sales mix is 20%

Dragon Sports Inc. manufactures and sells two products, baseball bats and baseball gloves. The fixed costs are $377,400, and the sales mix is 20% bats and 80% gloves. The unit selling price and the unit variable cost for each product are as follows:

Products	Unit Selling Price	Unit Variable Cost
Bats	$40	$30
Gloves	100	60

a. Compute the break-even sales (units) for both products combined. units

b. How many units of each product, baseball bats and baseball gloves, would be sold at the break-even point?

Baseball bats	units
Baseball gloves	units

Break-Even Sales and Sales Mix for a Service Company

Zero Turbulence Airline provides air transportation services between Los Angeles, California; and Kona, Hawaii. A single Los Angeles to Kona round-trip flight has the following operating statistics:

Fuel	$15,200
Flight crew salaries	11,642
Airplane depreciation	5,498
Variable cost per passengerbusiness class	65
Variable cost per passengereconomy class	50
Round-trip ticket pricebusiness class	575
Round-trip ticket priceeconomy class	320

It is assumed that the fuel, crew salaries, and airplane depreciation are fixed, regardless of the number of seats sold for the round-trip flight. If required round the answers to nearest whole number.

a. Compute the break-even number of seats sold on a single round-trip flight for the overall product, E. Assume that the overall product is 10% business class and 90% economy class seats.

Total number of seats at break-even

seats

b. How many business class and economy class seats would be sold at the break-even point?

Business class seats at break-even	seats
Economy class seats at break-even	seats

Margin of Safety

a. If Canace Company, with a break-even point at $518,400 of sales, has actual sales of $810,000, what is the margin of safety expressed (1) in dollars and (2) as a percentage of sales? Round the percentage to the nearest whole number.

1. $ 291,600

2. 36 %

b. If the margin of safety for Canace Company was 45%, fixed costs were $1,871,100, and variable costs were 55% of sales, what was the amount of actual sales (dollars)? (Hint: Determine the break-even in sales dollars first.) $ ___________________________