Answer Happy

Multiple-Product Breakeven Parker Pottery produces a line of vases and a line of ceramic figurines. Each line uses the same equipment and labor; hence, there are no traceable food costs Common fixed cost equals $50,000. Parker's accountant has begun to assess the profitability of the two lines and has gathered the following data for last year: Vases Figurines Price $40 $70 Variable cost 30 42 Contribution margin 510 $28 Number of units 1,000 500 Required: If required, round your final answers to nearest whole value. 4 1. Compute the number of vases and the number of figurines that must be sold for the company to break even Break-even vases 2,083 units Break-even figurines 1,042 ✔ units 2. Parker Pottery is considering upgrading its factory to improve the quality of its products. The upgrade will add $5,260 per year to total foxed cost. If the upgrade is successful, the projected sales of vases will be 1,500, and figurine sales will increase to 1,000 units. What is the new break-even point in units for each of the products? 2,062 X units Break-even vases 1,238 X units Break even figurines