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

$1,200

$600

40%

Tablets

700

350

60%

The estimated fixed costs for the current year are $9,000,000.

Required:

1. Determine the estimated units of sales of the overall company product, M, 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

Tablets

units

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

product with the higher contribution margin per unit

in this scenario than in part (1) because the sales mix is weighted more heavily toward the

of product.