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:

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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 328ac1fe3068065_1		$fill in the blank 328ac1fe3068065_2		$fill in the blank 328ac1fe3068065_3		fill in the blank 328ac1fe3068065_4		$fill in the blank 328ac1fe3068065_5
Carryall	fill in the blank 328ac1fe3068065_6		fill in the blank 328ac1fe3068065_7		fill in the blank 328ac1fe3068065_8		fill in the blank 328ac1fe3068065_9		fill in the blank 328ac1fe3068065_10
Package total									$fill in the blank 328ac1fe3068065_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 328ac1fe3068065_12 units

Break-Even Carryalls fill in the blank 328ac1fe3068065_13 units

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

blank	Total	blank	blank
Sales	$fill in the blank e3213303a024fe9_1	blank	blank
Total variable cost	fill in the blank e3213303a024fe9_2	blank	blank
Total contribution margin	$fill in the blank e3213303a024fe9_3	blank	blank
Total fixed cost	fill in the blank e3213303a024fe9_4
Operating income	$fill in the blank e3213303a024fe9_5	blank	blank