Question
Dragon Sports Inc. manufactures and sells two products, baseball bats and baseball gloves. The fixed costs are $308,000, and the sales mix is 60% bats
Dragon Sports Inc. manufactures and sells two products, baseball bats and baseball gloves. The fixed costs are $308,000, and the sales mix is 60% bats and 40% 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 the overall enterprise product, E.
b. How many units of each product, baseball bats and baseball gloves, would be sold at the break-even point?
Baseball bats | |
Baseball gloves |
a. If Canace Company, with a break-even point at $560,000 of sales, has actual sales of $800,000, 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.
2.
b. If the margin of safety for Canace Company was 20%, fixed costs were $1,102,400, and variable costs were 80% of sales, what was the amount of actual sales (dollars)? (Hint: Determine the break-even in sales dollars first.)
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