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Determine the estimated units of sales

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Problem - Sales mix and break-even sales - Data related to the expected sales of mountain bikes and road bikes for Cycle Sports Inc. for the current year, which is typical of recent years, are as follows:

Products

Unit Selling Price

Unit Variable Cost

Sales Mix

Mountain bikes

$800

$475

60%

Road bikes

700

325

40%

The estimated fixed costs for the current year are $724,500.

Determine the estimated units of sales of the overall (total) product necessary to reach the break-even point for the current year.

Based on the break-even sales (units) in part (1), determine the unit sales of both mountain bikes and road bikes for the current year.

Assume that the sales mix was 50% mountain bikes and 50% road bikes. Compare the break-even point with that in part (1). Why is it so different?

Reference no: EM132881712

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