Don Waller and company sells canisters of three mosquito repellant products: Cit

Question

Don Waller and company sells canisters of three mosquito repellant products: Citronella, DEET, and Mean Green. The company has annual fixed costs of $260,000. Last year, the company sold 5,000 canisters of its mosquito repellant in the ratio of 1:2:2. Waller's accounting department has compiled the following data related to the three mosquito repellants: $11 $15 $17 and variable costs $6 $12 $16. A) Calculate the number of canisters that must be sold for the company to break even. B) Calculate the number of canisters of Citronella, DEET, and Mean Green that must br sold to break even. C) How might Don Waller and Company reduce its break-even point?

Explanation / Answer

A. let the canisters sold are 2x, 4x and 4x 2x*(11-6) + 4x*(15-12) + 4x*(17-16) = 260,000 x= 10000 total number of canisters that must be sold for the company to break even = 10x = 10000*10 =100,000 B. No of Citronella =2*10000= 20,000 No of DEET = 4*10000= 40,000 No of mean green = 4*10000= 40,000 C. Don Waller and Company can reduce its break-even point by reducing its fixed costs Please consider the time devoted to make this reply by rating this as lifesaver. Thank u in advance. God bless u :)

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