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Kitchenware, Inc., sells two types of water pitchers, plastic and glass. Plastic pitchers cost the company...

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Accounting

Kitchenware, Inc., sells two types of water pitchers, plasticand glass. Plastic pitchers cost the company $15 and are sold for$30. Glass pitchers cost $24 and are sold for $45. All other costsare fixed at $982,800 per year. Current sales plans call for 14,000plastic pitchers and 42,000 glass pitchers to be sold in the comingyear.

a. How many pitchers of each type must be sold to break even inthe coming year?

b. Kitchenware, Inc., has just received a sales catalog from anew supplier that is offering plastic pitchers for $13. What wouldbe the new breakeven point if managers switched to the newsupplier?

Answer & Explanation Solved by verified expert
3.8 Ratings (428 Votes)
a Calculation of Contribution per unit of plastic pitchers and glass pitchers Particulars Plastic Glass Selling Price per unit 30 45 Variable Cost per unit 15 24 Contribution per unit 15    See Answer
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