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Palmer Golf Accessories sells golf shoes, gloves, and a laser-guided range-finder that measures distance. Shown below are unit cost and sales data.
Pairs of Shoes
Pairs of Gloves
Range-Finder
Unit sales price
$100
$30
$260
Unit variable costs
60
10
200
Unit contribution margin
$ 40
$20
$ 60
Sales mix
30%
60%
10%
Fixed costs are $630,000.
Instructions
(a) Compute the break-even point in units for the company.
(b) Determine the number of units to be sold at the break-even point for each product line.
(c) Verify that the mix of sales units determined in (b) will generate a zero net income.
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