Question

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 0 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 faucet-model that must be sold in order for Pure Water Products to earn a target profit of $212,000. 9,600

I'm unsure with my answer.

Answer 1

The answer is correct.

Explanation -

Let us assume that Pure Water Products produces

Units of faucet model - 4x

Units of picther filters - 3x

So according to the question

Selling Price for faucet model = $70 × 4x =$280x

Variable cost for faucet model = $30 × 4x = $120x

Selling Price for picther filters = $80 × 3x = $240x

Variable cost for picther filters = $45 × 3x = $135x

As we know

Profit = Sales - Variable Cost - Fixed Cost

Substituting items in above equation

212000 = 280x + 240x - 120x - 135x - 424000

212000 + 424000 = 520x - 255x

636000 = 265x

2400 = x

So units of faucet model to be sold in order for Pure Water Products to earn a target profit of $212000 = 4× 2400 = 9600 units

Answer = 9600 units.