Cherry Blossom Products Inc. produces and sells yoga-training products, how-to DVDs and a basic equipment set (blocks, strap, and small pillows).
Last year, Cherry Blossom Products sold 13,500 DVDs and 4,500 equipment sets.
Information on the two products is as follows:
|Variable cost per unit||$4||$15|
The total fixed cost is $84,920.
1. What is the sales mix of DVDs and equipment sets?
2. Compute the break-even quantity of each product.
The break-even quantity for DVDs is _____.
The break-even quantity for equipment sets is _____.
Break-Even Point - Definition:
The break-even point is a tangent where the revenues generated are equal to the total costs incurred. The costs are segregated into a variable and a fixed cost. The contribution margin formula is used when calculating the break-even point.
Answer and Explanation: 1
1. The following is required for calculating the sales mix:
- The sales volume of the DVDs and basic equipment set
- The sales per unit of the DVDs and...
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fromChapter 5 / Lesson 28
See how to calculate break-even point (in units and dollars). See the variables of the break-even point formula and examples. Understand the purpose of break-even analysis.