Question - The Doggy Palace is an upscale grooming salon for dogs. Doggy Palace sells two types of doggy shampoo. Shiny Coat sells for $20 per bottle and Flea-B-Gone sells for $10 per bottle. Fixed costs total $20,000. Additional cost data is as follows:
Shiny Coat Flea-B-Gone Price per bottle $20 $10
Unit variable cost $10 $5
Unit contribution margin $10 $5
Sales volume 1,600 3,200
Required:
1. How many bottles of Shiny Coat and Flea-B-Gone must the Doggy Palace sell in a year to break even?
2. At the current product mix, how many bottles of Shiny Coat and Flea-B-Gone must the Doggy Palace sell in a year in order to earn a profit of $25,000?