Question: 3 - 5 0 Multiproduct CVP and decision making. Clear Waters produces two types of water filters. One at taches to the faucet and cleans

3-50 Multiproduct CVP and decision making. Clear Waters produces two types of water filters. One at taches to the faucet and cleans all water that passes through the faucet. The other is a pitcher-cum-filter that only purifies water meant for drinking. The unit that attaches to the faucet is sold for $72 and has variable costs of $20. The pitcher-cum-filter sells for $88 and has variable costs of $16. Clear Waters sells two faucet models for every three pitchers sold. Fixed costs equal $960,000.1. What is the breakeven point in unit sales and dollars for each type of filter at the current sales mix? 2. Clear Waters is considering buying new production equipment. The new equipment will increase fixed cost by $166,400 per year and will decrease the variable cost of the faucet and the pitcher units by $4 and $8, respectively. Assuming the same sales mix, how many of each type of filter does Clear Waters need to sell to break even? 3. Assuming the same sales mix, at what total sales level would Clear Waters be indifferent between using the old equipment and buying the new production equipment? If total sales are expected to be 23,000 units, should Clear Waters buy the new production equipment?

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