Data related to the expected sales of kayaks and canoes for River Sports Inc. for the current year, which is typical of recent years, are as follows:

The estimated fixed costs for the current year are $1,440,000.

Instruction
1. Determine the estimated units of sales of the overall product necessary to reach the break-even point for the current year.
2. Based on the break-even sales (units) in part (1), determine the unit sales of kayaks and canoes for the current year.
3. Assume that the sales mix was 20% kayaks and 80% canoes. Determine the estimated units of sales of overall product necessary to reach the break-even point for the current year.
4. Based upon the break-even sales (units) in part (3), determine the unit sales of kayaks and canoes for the current year.
5. Why is the overall enterprise break-even point so different in (1) and(3)?

Transcribed Image Text:

Unit Selling Price $400 800 Products Unit Va riable Cost Kayaks Canoes $240 480 Sales Mix 80% 20%