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Sales mix and break$-$even sales

Data related to the expected sales of laptops and tablets for Tech Products Inc. for the current year, which is typical of recent years, are as follows:

ProductsUnit Selling PriceUnit Variable CostSales MixLaptops$$1,600$$$80040\%$Tablets$85035060\%$

The estimated fixed costs for the current year are $$2,498,600.$

Required:

$1.$Determine the estimated units of sales of the overall company product, M$,$ necessary to reach the break$-$even point for the current year.

fill in the blank $1$ of $1$ units

$2.$Based on the break$-$even sales $($units$)$ in part $(1),$ determine the unit sales of both laptops and tablets for the current year.

Laptops fill in the blank $1$ of $2$ units

Tablets fill in the blank $2$ of $2$ units

$3.$Assume that the sales mix was $50\%$ laptops and $50\%$ tablets. Compare the break$-$even point with that in part $(1).$ Why is it so different?

fill in the blank $1$ of $4$ units

The break$-$even point is fill in the blank $2$ of $4$

higherlowerthe samehigher

in this scenario than in part $(1)$ because the sales mix is fill in the blank $3$ of $4$

not weightedweighted less heavilyweighted more heavilyweighted less heavily

toward the product with the higher fill in the blank $4$ of $4$

contribution margin per unitsalesvariable costscontribution margin per unit

of product.

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$1.$ Subtract the combined unit variable cost from the combined unit selling price to determine the combined unit contribution margin. Divide the fixed costs by the combined unit contribution margin to arrive at total break$-$even units.

$2.$ Multiply the sales mix percentages for each product to determine the respective break$-$even units for laptops and tablets.

$3.$ Calculate using the same process as in requirement $(1)$ and $(2)$ except with a $50/50$ sales mix. How does the sales mix affect the break$-$even point? Consider the effect of the contribution margin for each product when answering.

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