The Nut House sells almonds, cashews, and pistachios. They sold 10,000 cans last

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 and additional information follows:

Product:          Unit sales price               unit variable cost

Almonds           $8.00                                        $4.00

Cashews          $10.00                                       $5.00

Pistachios        $6.00                                      $4.00

What is the breakeven sales volume and dollars for each nut (rounded)?

Explanation / Answer

Let sales for Pistachios= 2x

sales for cashew =x

sales for almonds = x/2

for breakeven, profit =0

2x*(6-4) +x*(10-5) +x/2*(8-4) =20,000

x=1,818.18 cans

breakeven sales volume for cashew= 1,818.18 cans

breakeven sales dollars for cashew= 1,818.18*10=$18,181.82

breakeven sales volume for Pistachios= 1,818.18*2 =3636.36 cans

breakeven sales dollars for Pistachios= 3636.36*6=$21,818.18

breakeven sales volume for almonds= 1,818.18/2 =909.09 cans

breakeven sales dollars for Pistachios= 909.09*8=$7,272.73

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