Share
Explore BrainMass

Breakeven Point on Products

Findlay Farms produces strawberries and raspberries. Annual fixed costs are $14,400. The cost driver for variable costs is "pints of fruit produced." The variable cost is $.65 per pint of strawberries and $.85 per pint of raspberries. Strawberries sell for $1.00 per pint, raspberries for $1.35 per pint. Two pints of strawberries are produced for every pint of raspberries.
1. Compute the number of pints of strawberries and the number of pints of raspberries produced and sold at the break-even point.
2. Suppose only strawberries are produced and sold. Compute the break-even point in pints.
3. Suppose only raspberries are produced and sold. Compute the break-even point in pints.

Solution Preview

1. Compute the number of pints of strawberries and the number of pints of raspberries produced and sold at the break-even point

Taking X as pints of raspberries, the pint of strawberries would be 2X.
The sales mix is 33.33% (1/3) raspberries and 66.67% strawberries ...

Solution Summary

The solution explains the calculation of breakeven point

$2.19