B-18.08 Problem

B-18.08 Problem - The company's total fixed costs are...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
B-18.08 Bright Eyes manufactures and sells two products. The first product is a disposable contact lens set that lasts about 3 months. The second product is a wetting solution. Customers of the first product use one bottle of solution each month. As a result, bottles of solution outsell lens by a 3:1 ratio. Lens sell for $36 per set, and have a contribution margin ratio of 50%. The solution sells for $6 per bottle, but only generates variable costs of $1.
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: The company's total fixed costs are $9,900,000. (a) What level of total sales is necessary to achieve break even? (b) If a competitor began selling a wetting solution that forced Bright Eyes to reduce the price for its solution to $3 (to maintain market share and the 3:1 ratio of solution to lens), how many lens sets must be sold for the company to break even?...
View Full Document

This note was uploaded on 02/29/2012 for the course ACCOUNTING 101 taught by Professor Hudack during the Spring '11 term at FIU.

Ask a homework question - tutors are online