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.