1) Cy-Ski Unlimited Inc. wants tolaunch a new line of ski jackets for their winter...

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Accounting

1) Cy-Ski Unlimited Inc. wants tolaunch a new line of ski jackets for their winter collection. Thejackets are expected to sell at a price of $ 200 each. You canprocure these jackets from a contract manufacturer overseas. Youhave estimated the total landed cost of men’s and women’s jacketswill be $175 and $160 per unit respectively. You estimate fixedcosts to be $ 260,000 (contract setup, ongoing monitoring,specialized equipment for your product, etc.).
a) If you expect to sell a sales mix is 1:1 (one men’s jacketsold for every women’s jacket) what is the breakeven point in unitsof jackets? dollar sales?
b) If the sales mix is 1:2 (one men’s jacket sold for every 2women’s jacket) what is the break even point in units of men’s andwomen’s jackets and in dollar sales?
c) If the sales mix is 2:1 (two men’s jacket sold for everywomen’s jacket) what is the break even point in units of men’s andwomen’s jackets and in dollar sales?
d) Which sales mix (from a, b, c) should you choose?
e) With the sales mix selected (in d) how many units of men’sand women’s jackets will Cy-Ski Inc. need to produce/sell to have aprofit of $100,000?

Answer & Explanation Solved by verified expert

4.5 Ratings (688 Votes)

a Contribution margin per mens jacket 200175 2500 Contribution margin per womens jacket 200160 4000 Weighted average contribution margin for a sales mix of 11 25124012 3250 Breakeven point in composite units Fixed costWeighted See Answer

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In: Accounting1) Cy-Ski Unlimited Inc. wants tolaunch a new line of ski jackets for their winter collection....1) Cy-Ski Unlimited Inc. wants tolaunch a new line of ski jackets for their winter collection. Thejackets are expected to sell at a price of $ 200 each. You canprocure these jackets from a contract manufacturer overseas. Youhave estimated the total landed cost of men’s and women’s jacketswill be $175 and $160 per unit respectively. You estimate fixedcosts to be $ 260,000 (contract setup, ongoing monitoring,specialized equipment for your product, etc.).a) If you expect to sell a sales mix is 1:1 (one men’s jacketsold for every women’s jacket) what is the breakeven point in unitsof jackets? dollar sales?b) If the sales mix is 1:2 (one men’s jacket sold for every 2women’s jacket) what is the break even point in units of men’s andwomen’s jackets and in dollar sales?c) If the sales mix is 2:1 (two men’s jacket sold for everywomen’s jacket) what is the break even point in units of men’s andwomen’s jackets and in dollar sales?d) Which sales mix (from a, b, c) should you choose?e) With the sales mix selected (in d) how many units of men’sand women’s jackets will Cy-Ski Inc. need to produce/sell to have aprofit of $100,000?