Data related to the expected sales of snowboards and skis for Winter Sports Inc. for the current year, which is typical of recent years, are as follows:

Products	Unit Selling Price		Unit Variable Cost		Sales Mix
Snowboards	$180		$120		30%
Skis	400		190		70%

The estimated fixed costs for the current year are $173,250.

Required:

1. Determine the estimated units of sales of the overall (total) product necessary to reach the break-even point for the current year. units

2. Based on the break-even sales in units in part 1, determine the unit sales of both snowboards and skis for the current year.

Snowboards:	units
Skis:	units

3. Assume that the sales mix was 70% snowboards and 30% skis. Determine the estimated units of sales of the overall product necessary to reach the break-even point for the current year. units

Hide Feedback

Incorrect

Check My Work Feedback

1. Subtract the combined unit variable cost from the combined unit selling price to determine the combined unit contribution margin. Divide the fixed costs by the combined unit contribution margin to arrive at total break-even units.

2. Multiply the sales mix percentages for each product to determine the respective break-even units for snowboards and skis.

3. Calculate using the same process as in requirement (2) except with new sales mix assumption. How does the sales mix affect the break-even point? Consider the effect of the contribution margin for each product when answering.

Learning Objective 5.