Sports Nation sells two types of soccer jerseys: Deluxe and Superior.The following table shows the sales price and unit variable costs for each jersey.Sports Nation incurs $200,000 a year in fixed costs.Assume the store has a sales mix of three Deluxe jerseys for every Superior jersey sold. Required:
a.How many jerseys of each type will be sold at the breakeven point?
b.What amount of revenue would need to be generated by each type of jersey for the company to earn $25,000 in operating income?

Question

Sports Nation sells two types of soccer jerseys: Deluxe and Superior.The following table shows the sales price and unit variable costs for each jersey.Sports Nation incurs $200,000 a year in fixed costs.Assume the store has a sales mix of three Deluxe jerseys for every Superior jersey sold.  Required: 
a.How many jerseys of each type will be sold at the breakeven point?
b.What amount of revenue would need to be generated by each type of jersey for the company to earn $25,000 in operating income?

Quizplus · Accepted Answer

The Answer of Sports Nation sells two types of soccer jerseys: Deluxe and Superior.The following table shows the sales price and unit variable costs for each jersey.Sports Nation incurs $200,000 a year in fixed costs.Assume the store has a sales mix of three Deluxe jerseys for every Superior jersey sold.  Required: 
a.How many jerseys of each type will be sold at the breakeven point?
b.What amount of revenue would need to be generated by each type of jersey for the company to earn $25,000 in operating income?

Sports Nation Sells Two Types of Soccer Jerseys: Deluxe and Superior.The