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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?
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