This year Babco's fixed costs total ($ 110000). The business sells recyclable 1 -litre thermos drink containers
Question:
This year Babco's fixed costs total \(\$ 110000\). The business sells recyclable 1 -litre thermos drink containers for \(\$ 13\) each. The variable cost per container is \(\$ 8\).
Required:
a Compute the break-even point in number of containers.
b Compute the number of containers that Babco must sell to earn a profit of \(\$ 70000\).
c If the total fixed cost increases to \(\$ 150000\) next year:
i what will be Babco's break-even point in containers?
ii what profit (or loss) will Babco have if it sells 28000 containers?
iii how many containers will Babco have to sell to earn a profit of \(\$ 70000\) ?
Step by Step Answer:
Accounting Information For Business Decisions
ISBN: 9780170253703
2nd Edition
Authors: Billie Cunningham, Loren A. Nikolai, John Bazley, Marie Kavanagh, Geoff Slaughter, Sharelle Simmons