Answer Happy

Sales Mix and Break-Even Sales 40% 850 350 60% 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 Tablets The estimated fixed costs for the current year are $2,498,600 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. 4,018 X 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 800 X units Tablets 503 X units 3. Assume that the sales mix was 50% laptops and 50% tablets. Compute the break-even point of the overall (total) product E. units Why is it so different? 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 Feedback Check My Work 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 tablet PCs. 3. Calculate using the same process as in requirement (2) except with a 50/50 sales mix. How does the sales mix affect the break-even point? Consider the effect of the contribution margin for each product when answering