Question

Blossom’s sells two products, a pepper relish with a selling price of $5.05 and a variable cost per jar of $2.15 and a blackberry marmalade with a selling price of $5.05 and a variable cost per jar of $2.05. Blossom’s expected sales are 1020 jars of pepper relish and 1530 jars of blackberry marmalade. Fixed expenses are $8686. At what volume of sales dollars will Blossom’s break-even?

$12878

$14817

cannot be determined from the information provided

$8686

Answer 1

Correct Option B i.e. $14,817
	pepper relish	blackberry marmalade
	Per Unit	Total	Per Unit	Total	Grand Total
Sales Unit		1020		1,530.00
Sales Value	5.05	5151	5.05	7,726.50	12,877.50
Less: Variable cost	2.15	2193	2.05	3,136.50	5,329.50
Contribution margin	2.9	2958	3	4590	7,548.00
Contribution margin ratio					58.61%
Less: fixed cost					8,686.00
Net Income					(1,138.00)
Break even = Fixed cost / contribution margin ratio
14,817