Study Appendix 2A. Eames Farms produces strawberries and raspberries. Annual fixed costs are $15,300. The cost driver for variable costs is “pints of fruit produced.” The variable cost is $.85 per pint of strawberries and $.90 per pint of raspberries. Strawberries sell for $1.05 per pint, raspberries for $1.30 per pint. Five pints of strawberries are produced for every two pints of raspberries.
1. Compute the number of pints of strawberries and the number of pints of raspberries produced and sold at the break-even point.
2. Suppose only strawberries are produced and sold. Compute the break-even point in pints.
3. Suppose only raspberries are produced and sold. Compute the break-even point in pints.