Answer
For Faucet Filters:
Breakeven Point (Units) = 1,200,000 / 65 ≈ 18,462 units
Breakeven Point (Dollars) = Breakeven Point (Units) * Selling Price per Faucet Filter = 18,462 units * 100 = 1,846,200
For Pitcher Filters:
Breakeven Point (Units) = 1,200,000 $\div$ 90 ≈ 13,333 units
Breakeven Point (Dollars) = Breakeven Point (Units) $\times $Selling Price per Pitcher Filter = 13,333 units $\times$ 120 = 1,599,960
Work Step by Step
For Faucet Filters:
Breakeven Point (Units) = Fixed Costs / Contribution Margin per Faucet Filter
Contribution Margin per Faucet Filter = Selling Price - Variable Cost = 100 - 35 = 65
For Pitcher Filters:
Breakeven Point (Units) = Fixed Costs$ \div $Contribution Margin per Pitcher Filter
Contribution Margin per Pitcher Filter = Selling Price - Variable Cost = 120 - 30 = 90
