If the product sales mix were to change to four pairs of AUsunglasses for each pair of NZ sunglasses, what would be the newbreak-even volume for Sundial, Inc.?
Related questions
On-the-Go, Inc., produces two models of traveling cases for laptop computers: the Programmer and the Executive. The bags have the following characteristics:
| Programmer | Executive | |||||
| Selling price per bag | $ | 70 | $ | 100 | ||
| Variable cost per bag | $ | 30 | $ | 40 | ||
| Expected sales (bags) per year | 7,000 | 10,500 | ||||
The total fixed costs per year for the company are $674,000.
Required:
a. What is the anticipated level of profits for the expected sales volumes?
b. Assuming that the product mix is the same at the break-even point, compute the break-even point. (Round your final answer up to the nearest whole unit.)
c. If the product sales mix were to change to nine Programmer-style bags for each Executive-style bag, what would be the new break-even volume for On-the-Go? (Round your final answer up to the nearest whole unit.)
Sales Mix and Break-Even Sales
Data related to the expected sales of snowboards and skis for Winter Sports Inc. for the current year, which is typical of recent years, are as follows:
| Products | Unit Selling Price | Unit Variable Cost | Sales Mix | |||
| Snowboards | $210 | $140 | 20% | |||
| Skis | 540 | 250 | 80% | |||
The estimated fixed costs for the current year are $280,440.
Instructions:
1. Determine the estimated units of sales of the overall product 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 snowboards and skis for the current year.
| Snowboards | _________________ units |
| Skis | _________________ units |
3. Assume that the sales mix was 80% snowboards and 20% skis. Determine the estimated units of sales of the overall product necessary to reach the break-even point for the current year.
_________________ units
4. Based upon the break-even sales (units) in part (3), determine the unit sales of snowboards and skis for the current year.
| Snowboards | _________________ units | |
| Skis | _________________ units |
5. The overall enterprise break-even point _________________ from (1) to (3) because the sales mix is weighted more toward the product with the _________________ contribution margin per unit of product.
