Break even with more than one product
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Complete the exercise below on breakeven.
Submit an excel file and label your answers.
Breakeven with More Than One Product
1. Suppose that Colter Durham, on average, sells one toolbox for every three
StowCarts sold. In this situation, an average (typical) sale would be: 3 StowCarts
× $150 + 1 toolbox × $75, for a total sale of $525. If the variable cost of one
StowCart is $127, and the variable cost of one toolbox is $35, how many
StowCarts and toolboxes must be sold to attain breakeven? FIGURE 12.9
2. Assume that 9,900 StowCarts and 3,300 toolboxes are expected to be sold
this year. Colter Durham Breakeven Analysis can spend an additional $50,000
on advertising in either of two ways: (1) advertising will increase current unit
sales of StowCarts and toolboxes both by 20 percent, or (2) advertising will
increase the percentage of toolboxes sold from 33 percent of StowCart sales to 50 percent of StowCart sales. What should Colter Durham do?
3. How would you calculate breakeven if Colter Durham were to produce and sell
50 different items?
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