Sales Mix and Break-Even Sales

Home Run Sports Inc. manufactures and sells two products, baseball bats and baseball gloves. The fixed costs are $368,000, 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	$70		$50
Gloves	180		110

a. Compute the break-even sales (units) for the overall product, E. fill in the blank 1 units

b. How many units of each product, baseball bats and baseball gloves, would be sold at the break-even point?

Baseball bats	fill in the blank 2 units
Baseball gloves	fill in the blank 3 units

Break-Even Sales and Sales Mix for a Service Company

Zero Turbulence Airline provides air transportation services between Los Angeles, California; and Kona, Hawaii. A single Los Angeles to Kona round-trip flight has the following operating statistics:

Fuel	$7,567
Flight crew salaries	5,796
Airplane depreciation	2,737
Variable cost per passengerbusiness class	45
Variable cost per passengereconomy class	35
Round-trip ticket pricebusiness class	575
Round-trip ticket priceeconomy class	305

It is assumed that the fuel, crew salaries, and airplane depreciation are fixed, regardless of the number of seats sold for the round-trip flight. If required round the answers to nearest whole number.

a. Compute the break-even number of seats sold on a single round-trip flight for the overall product, E. Assume that the overall product mix is 20% business class and 80% economy class tickets.

Total number of seats at break-even

fill in the blank 1 seats

b. How many business class and economy class seats would be sold at the break-even point?

Business class seats at break-even	fill in the blank 2 seats
Economy class seats at break-even	fill in the blank 3 seats