Break-Even Point in Units for a Multiple-Product Firm

Suppose that Chillmax Company now sells both pairs of shoes and fabric carryalls. The pairs of shoes are priced at $60 and have variable costs of $21 each. The carryalls are priced at $36 and have variable costs of $9 each. Total fixed cost for Chillmax as a whole equals $91,500 (includes all fixed factory overhead and fixed selling and administrative expense). Next year, Chillmax expects to sell 3,500 pairs of shoes and 875 carryalls.

Required:

1. Form a package of shoes and carryalls based on the sales mix expected for the coming year.

Product	Price		Unit Variable Cost	=	Unit Contribution Margin		Sales Mix	=	Package Unit Contribution Margin
Shoes	$fill in the blank 6c2ae1014f9bfcb_1		$fill in the blank 6c2ae1014f9bfcb_2		$fill in the blank 6c2ae1014f9bfcb_3		fill in the blank 6c2ae1014f9bfcb_4		$fill in the blank 6c2ae1014f9bfcb_5
Carryall	fill in the blank 6c2ae1014f9bfcb_6		fill in the blank 6c2ae1014f9bfcb_7		fill in the blank 6c2ae1014f9bfcb_8		fill in the blank 6c2ae1014f9bfcb_9		fill in the blank 6c2ae1014f9bfcb_10
Package total									$fill in the blank 6c2ae1014f9bfcb_11

2. Calculate the break-even point in units for pairs of shoes and for carryalls.

Break-Even Pairs of Shoes fill in the blank 6c2ae1014f9bfcb_12 units

Break-Even Carryalls fill in the blank 6c2ae1014f9bfcb_13 units

3. Check your answer by preparing a contribution margin income statement. Enter all amounts as positive value.

Chillmax Company
Contribution Margin Income Statement
At Break-Even Point in Units for a Multiple-Product Firm
	Total
Sales	$
Total variable cost
Total contribution margin	$
Total fixed cost
Operating income	$