Question

Sheridan, Inc., sells two types of water pitchers, plastic and glass. Plastic pitchers cost the company $19 and are sold for $34. Glass pitchers cost $28 and are sold for $49. All other costs are fixed at $3,429,972 per year. Current sales plans call for 48,860 plastic pitchers and 146,580 glass pitchers to be sold in the coming year. How many pitchers of each type must be sold to break even in the coming year? (Use contribution margin per unit to calculate breakeven units.) Plastic pitchers Glass pitchers

Answer 1

Solution: Sheridan Inc.'s sales mix is : 48,860 (plastic pitchers) to 146,580 ( glass pitchers)

Or, Sales mix : 1 : 3

So, at break-even point ;  

($34-19)*X + ($49-28)*3 - $3,429,972 = $0

15X + 63X = $3,429,972

X = $3,429,972 / 78

Thus, plastic pitchers must to be sold (x) = 43,974

  Glass pitchers must to be sold (3x) = 131,922