Data related to the expected sales of lacrosse sticks and hockey sticks for Athletics Inc. for the current year, which is typical of recent years, are as follows:
|
Products |
Unit Selling Price |
Unit Variable Cost |
Sales Mix |
|
Lacrosse sticks |
$52.00 |
$28.00 |
70% |
|
Hockey sticks |
64.00 |
36.00 |
30% |
The estimated fixed costs for the current year are $1,857,240.
Instructions
1. Determine the estimated units of sales of the overall product necessary to reach the break even point for the current year.
2. Based on the break even sales (units) in part (1), determine the unit sales of both lacrosse sticks and hockey sticks for the current year.
3. Assume that the sales mix was 30% lacrosse sticks and 70% hockey sticks. Compare the break even point with that in part (1). Why is it so different?