Pure Water Products produces two types of water filters. One
attaches to the faucet and cleans all water
that passes through the faucet. The other is a pitcher-filter that
only purifies water meant for drinking.
Revenue and cost information for each product appears below:
● the unit that attaches to the faucet is sold for $70 and has variable costs of $30
● the pitcher-filter sells for $80 and has variable costs of $45
● fixed costs total $424,000
● Pure Water sells 4 faucet models for every 3 pitcher-filters sold
Calculate the number of units of the
pitcher-filters that must be sold
in order for Pure Water Products
to break-even.
Solution:
Computation of weighted average contribution margin per unit | |||
Particulars | Faucet | Pitcher Filter | Total |
Selling price per unit | 70 | 80 | |
Variable cost per unit | 30 | 45 | |
Contribution margin per unit | 40 | 35 | |
Sales mix | 4/7 | 3/7 | |
Weighted average contribution margin per unit | 22.8571 | 15.0000 | 37.8571 |
Nos of units to be sold to break even = Fixed costs / Weighted average contribution margin per unit
= $424,000 / $37.8571 = 11200 units
Nos of units of the pitcher filters to be sold to break even = 11200*3/7 = 4800 units
Pure Water Products produces two types of water filters. One attaches to the faucet and cleans...
Pure Water Products produces two types of water filters. One attaches to the faucet and cleans all water that passes through the faucet. The other is a pitcher-filter that only purifies water meant for drinking. Revenue and cost information for each product appears below: the unit that attaches to the faucet is sold for $70 and has variable costs of $30 the pitcher-filter sells for $80 and has variable costs of $45 • fixed costs total $424,000 • Pure Water...
Pure Water Products produces two types of water filters. One attaches to the faucet and cleans all water that passes through the faucet. The other is a pitcher-filter that only purifies water meant for drinking. Revenue and cost information for each product appears below: ● the unit that attaches to the faucet is sold for $70 and has variable costs of $45 ● the pitcher-filter sells for $80 and has variable costs of $30 ● fixed costs total $442,000 ●...
Pure Water Products produces two types of water filters. One attaches to the faucet and cleans all water that passes through the faucet. The other is a pitcher-filter that only purifies water meant for drinking. Revenue and cost information for each product appears below: ● the unit that attaches to the faucet is sold for $70 and has variable costs of $30 ● the pitcher-filter sells for $80 and has variable costs of $45 ● fixed costs total $424,000 ● Pure Water sells 4...
Pure Water Products produces two types of water filters. One attaches to the faucet and cleans all water that passes through the faucet. The other is a pitcher-filter that only purifies water meant for drinking. Revenue and cost information for each product appears below: ● the unit that attaches to the faucet is sold for $70 and has variable costs of $30 ● the pitcher-filter sells for $80 and has variable costs of $45 ● fixed costs total $424,000 ● Pure Water sells 4...
Pure Water Products produces two types of water filters. One attaches to the faucet and cleans all water that passes through the faucet. The other is a pitcher-filter that only purifies water meant for drinking. Revenue and cost information for each product appears below: the unit that attaches to the faucet is sold for $70 and has variable costs of $30 the pitcher-filter sells for $80 and has variable costs of $45 fixed costs total $424,000 • Pure Water sells...
Pure Water Products produces two types of water filters. One attaches to the faucet and cleans all water that passes through the faucet. The other is a pitcher-filter that only purifies water meant for drinking. Revenue and cost information for each product appears below: the unit that attaches to the faucet is sold for $70 and has variable costs of $30 the pitcher-filter sells for $80 and has variable costs of $45 fixed costs total $424,000 Pure Water sells 4...
Pure Water Products produces two types of water filters. One attaches to the faucet and cleans all water that passes through the faucet. The other is a pitcher-filter that only purifies water meant for drinking. Revenue and cost information for each product appears below: the unit that attaches to the faucet is sold for $70 and has variable costs of $30 the pitcher-filter sells for $80 and has variable costs of $45 fixed costs total $424,000 Pure Water sells 4...
Pure Water Products produces two types of water filters. One attaches to the faucet and cleans all water that passes through the faucet. The other is a pitcher-filter that only purifies water meant for drinking. Revenue and cost information for each product appears below: ● the unit that attaches to the faucet is sold for $70 and has variable costs of $30 ● the pitcher-filter sells for $80 and has variable costs of $45 ● fixed costs total $424,000 ● Pure Water sells 4...
Pure Water Products produces two types of water filters. One attaches to the faucet and cleans all water that passes through the faucet. The other is a pitcher-filter that only purifies water meant for drinking. Revenue and cost information for each product appears below: ● the unit that attaches to the faucet is sold for $70 and has variable costs of $45 ● the pitcher-filter sells for $80 and has variable costs of $30 ● fixed costs total $442,000 ●...
Pure Water Products produces two types of water filters. One attaches to the faucet and cleans all water that passes through the faucet. The other is a pitcher-filter that only purifies water meant for drinking. Revenue and cost information for each product appears below: the unit that attaches to the faucet is sold for $70 and has variable costs of $45 . the pitcher-filter sells for $80 and has variable costs of $30 e fixed costs total $442,000 . Pure...