The Parsons Company Makes and Sells Two Models of Blenders

Essay

The Parsons Company makes and sells two models of blenders, as follows:
The Parsons Company expects to incur annual fixed costs of $151,250. The relative sales mix of the products is 3 units of Smoothie Pro for every one unit of Blendmaster.Required:
1) Determine the total number of blenders (Smoothie Pro and Blendmaster combined) that Parsons must sell to break even.2) What is the number of units of Smoothie Pro and of Blendmaster that Parsons would expect to sell at the break-even point?
$$\begin{array} { | l | l | l | } \hline & { \text { Smoothie Pro } } & { \text { Blendmaster } } \\\hline \text { Sales price per unit } & \$ 50 & \$ 80 \\\hline \text { Variable cost per unit } & 25 & 45 \\\hline \text { Contribution margin per unit } & \$ 25 & \$ 35 \\\hline\end{array}$$