Solved: How might company reduce the break-even point, Managerial Accounting

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How might company reduce the break-even point

Response to the following problem:

Clean Skin Company sells bottles of three face wash products: Daily Wash, Mud Mask, and Face Cleanser. The company has annual fixed costs of $300,000. Last year, the company sold 7,500 bottles of its face-wash products in the ratio of 4:2:4. Clean Skins accounting dept. has complied the following data related to the three face wash products:

Daily Wash Mud Wash Face Cleanser

Price per bottle $12.00 $20.00 $14.00

Variable costs per bottle 2.00 8.00 6.00

A. Calculate the total number of bottles that must be sold for the company to break even.

B. Calculate the number of bottles of Daily Wash, Mud Mask, and Face Cleanser that must be sold to break even.

C. How might Clean Skin Company reduce its break-even point?

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Managerial Accounting: How might company reduce the break-even point

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Managerial Accounting: How might company reduce the break-even point

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