Response to the following problem:
Kitchenware, Inc., sells two types of water pitchers, plastic and glass. Plastic pitchers cost the company $15 and are sold for $30. Glass pitchers cost $24 and are sold for $45. All other costs are fixed at $982,800 per year. Current sales plans call for 14,000 plastic pitchers and 42,000 glass pitchers to be sold in 2011.
Required:
How many pitchers of each type must be sold to break even in 2011?
Kitchenware, Inc., has just received a sales catalog from a new supplier that is offering plastic pitchers for $13. What would be the new breakeven point if managers switched to the new supplier?