Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Sales Mix and Break-Even Sales Data related to the expected sales of laptops and tablets for Tech Products Inc. for the current year, which is

image text in transcribed

Sales Mix and Break-Even Sales Data related to the expected sales of laptops and tablets for Tech Products Inc. for the current year, which is typical of recent years, are as follows: Products Unit Selling Price Unit Variable Cost Sales Mix Laptops $1,600 $800 409 Tablets 900 450 60% The estimated fixed costs for the current year are 53,894,000. Required: 1. Determine the estimated units of sales of the overall (total) product, E, necessary to reach the break-even point for the current year. units 2. Based on the break-even sales (units) in part (1), determine the unit sales of both laptops and tablets for the current year. Laptops units Tablets units 3. Assume that the sales mix was 60% laptops and 40% tablets. Compare the break-even point with that in part (1). Why is it so different? units The break-even point is lower in this scenario than in part (1) because the sales mix is weighted more heavily toward the product with the higher contribution margin per unit of product. 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 laptops and tablets. 2. Calculate using the same process as in requirement (1) except with a 60/40 sales mix. How does the sales mix affect the break-even point? Consider the effect of the contribution margin for each product when answering

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Intermediate Accounting

Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield

18th Edition

1119790972, 9781119790976

More Books

Students also viewed these Accounting questions