Required:
a. Compute the break even sales (units).
b. How many units of each product, MP3 players and satellite radios, would be sold at the break even point?
Sales Mix and Break-Even Sales
New Wave Technology Inc. manufactures and sells two products, MP3 players and satellite radios. The fixed costs are $655,000, and the sales mix is 20% MP3 players and 80% satellite radios. The unit selling price and the unit variable cost for each product are as follows:
Products Unit Selling Price Unit Variable Cost
MP3 players $60 $50
Satellite Radios 150 90