Speed Tek produces two models of professional swim goggles-Jet and Spirit-both with fog-free acrylic lenses. Speed Tek has a 30% income tax rate. Information regarding the products is summarized for the month of May in the following table: The company's sales mix is expected to remain stable over the next year.
a. Complete the following statement: For every__________ pairs of Jet goggles, Speed Tek sells _________ pairs of Spirit goggles.
b. How many total goggles is Speed Tek expected to sell at break-even? (Round to zero decimal places)
c. When calculating break-even points with multiple products, why is the weighted average contribution margin necessary?
d. The management team of Speed Tek expects sales volume and total fixed costs to increase by 10% during June. Determine the number of total goggles that Speed Tek must now sell to break-even in June.
e. Based on your answer to part d, would you recommend the company make the change? Briefly explain why or why not.

Question

Speed Tek produces two models of professional swim goggles-Jet and Spirit-both with fog-free acrylic lenses. Speed Tek has a 30% income tax rate. Information regarding the products is summarized for the month of May in the following table:  The company's sales mix is expected to remain stable over the next year. 
a. Complete the following statement: For every__________ pairs of Jet goggles, Speed Tek sells _________ pairs of Spirit goggles.
b. How many total goggles is Speed Tek expected to sell at break-even? (Round to zero decimal places)
c. When calculating break-even points with multiple products, why is the weighted average contribution margin necessary?
d. The management team of Speed Tek expects sales volume and total fixed costs to increase by 10% during June. Determine the number of total goggles that Speed Tek must now sell to break-even in June.
e. Based on your answer to part d, would you recommend the company make the change? Briefly explain why or why not.

Quizplus · Accepted Answer

The Answer of Speed Tek produces two models of professional swim goggles-Jet and Spirit-both with fog-free acrylic lenses. Speed Tek has a 30% income tax rate. Information regarding the products is summarized for the month of May in the following table:  The company's sales mix is expected to remain stable over the next year. 
a. Complete the following statement: For every__________ pairs of Jet goggles, Speed Tek sells _________ pairs of Spirit goggles.
b. How many total goggles is Speed Tek expected to sell at break-even? (Round to zero decimal places)
c. When calculating break-even points with multiple products, why is the weighted average contribution margin necessary?
d. The management team of Speed Tek expects sales volume and total fixed costs to increase by 10% during June. Determine the number of total goggles that Speed Tek must now sell to break-even in June.
e. Based on your answer to part d, would you recommend the company make the change? Briefly explain why or why not.

Speed Tek Produces Two Models of Professional Swim Goggles-Jet and Spirit-Both