Question

View Policies Current Attempt in Progress Oriole, Inc., sells two types of water pitchers, plastic and glass. Plastic pitchers cost the company $39 and are sold for $54. Glass pitchers cost $48 and are sold for $69. All other costs are fixed at $1,837,836 per year. Current sales plans call for 26,180 plastic pitchers and 78,540 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 e Textbook and Media Oriole, Inc., has just received a sales catalog from a new supplier that is offering plastic pitchers for $37. What would be the new contribution margin per unit if managers switched to the new supplier? Plastic pitchers Glass pitchers 100%

Answer 1

Sales mix ratio	0.33	or 1:3	=26180/78540
	Plastic Pitchers	Glass Pitchers
Selling price per unit	54	69
Less: Variable cost per unit	39	48
Contribution margin per unit	15	21
a
Fixed costs	1837836
/ Weighted Contribution margin per unit	19.50	=(15*1/4)+(21*3/4)
Overall break even units	94248
Break even units:
Plastic Pitchers	23562	=94248*1/4
Glass Pitchers	70686	=94248*3/4
b
	Plastic Pitchers	Glass Pitchers
Selling price per unit	54	69
Less: Variable cost per unit	37	48
Contribution margin per unit	17	21
c
Fixed costs	1837836
/ Weighted Contribution margin per unit	20.00	=(17*1/4)+(21*3/4)
Overall break even units	91892
Break even units:
Plastic Pitchers	22973	=91892*1/4
Glass Pitchers	68919	=91892*3/4