Question

The nut house sells almonds, cashews, and pistachios. They sold 10,000 cans last year. Pistachios outsold cashews by a margin of 2 to 1 in cans. sales of almonds were half the sales of cashews in cans. fixed costs for the nut house are 20,000 . almonds: unit sales Price:8.00 unit variable:4.00 cashews:unit sales price:10.00 unit variable:5.00 Pistachios: unit sales price:6.00 unit variable cost: 4.00 what is the breakeven sales volume and dollars for each nut rounded?

Answer 1

Solution:

	Almonds	Cashews	Pistachios
Unit Selling Price	$8.00	$10.00	$6.00
Less: Variable Costs	$4.00	$5.00	$4.00
Contribution Margin per unit	$4.00	$5.00	$2.00
x Product/Sales Mix Ratio (Refer Note)	2 / 3.5	1 / 3.5	0.5 / 3.5
	$2.29 (4*2/3.5)	$1.43 (5*1/3.5)	$0.29 (2*.5/3.5)
Weighted Avg Contribution Margin per unit (4.14 + 3.94)	$4.00
Total Fixed Costs	$20,000
Break Even Volume Sales for the company (Total Fixed Cost / Weighted Avf CM per unit	5000 ($20,000 / 4000)
Break Even Point in Units for company	5000	5000	5000
x Sales Mix	2 / 3.5	1 / 3.5	0.5 / 3.5
Break Even Volume Sales for each product	2,857 (5000*2 / 3.5)	1,429 (5000*1/3.5)	714 (5000*0.5/3.5)
Unit Selling Price	$8	$10	$6
Break Even Sales in dollars for each product	$22,856 (2,857*8)	$14,290 (1429*10)	$4,284 (714*6)

Note:

	Mix	Ratio
Almonds (2 to 1 in cans)	2	2/3.5
Cashews	1	1/3.5
Pistachios (half of Cashews)	0.5	0.5/3.5
Total	3.5

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