Module 3 Lesson 3 3-21

Kitchenware, Inc., sells two types of water pitchers, plastic and glass. Plastic pitchers cost the company $17 and are sold for $32, Glass pitchers cost $26 and are sold for $47. All other costs are fixed at $3, 007, 368 per year. Current sales plans call for 42, 840 plastic pitchers and 128, 520 glass pitchers to be sold in the coming year. (a) How many pitchers of each type must be sold to break Plastic pitchers Glass pitchers even in the coming year? (Use contribution margin per unit to calculate Breakeven units.) (b) Kitchenware, Inc., has just received a sales catalog from a new supplier that is offering plastic pitchers for $15. What would be the new contribution margin per unit if managers switched to the new supplier? What would be the new breakeven point if managers switched to the new supplier? (Use contribution margin per unit to calculate Breakeven units. Round answers to 0 decimal places, e.g. 25, 000.)