Blue Mountain Coffee Company sells three coffee products to go (flavored, lattes, and iced coffees). Additionally,...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Blue Mountain Coffee Company sells three coffee products to go (flavored, lattes, and iced coffees). Additionally, they sell their private label coffee beans whole or ground. Their store fronts are small with no seating-providing only walk-up service generally located in outdoor walking/shopping districts. The P&L Statement below shows one store's weekly budget. Additional information is provided below. Use the worksheet to help answer the questions. Blue Mountain Coffee Company Forecast P&L - Week 1, March 2024 Flavored Coffees (12 oz) Lattes (20 oz) Iced Coffees (1602) Revenue $1,500 $6.00 $3,000 $6.00 $2,700 $4.50 $2,100 Coffee Beans $20.00 Total $9,300 Variable costs (ingredients) 600 2.00 2000 4.00 1,950 3.25 840 8.00 5,390 Contribution margin $900 $3.00 $1,000 $2.00 $750 $1.25 $1,200 $12.00 $3,910 Direct Fixed costs $450 $450 $625 $1,000 Segment Margn $450 $550 $1251 $260 $2.525 $1,385 Fixed operating expenses (rent marketing, labor) 475 Pre-tax operating income Income taxes @21% After-tax income Operating Data 1. Weekly volume 300 500 600 105 $ 010 In on $ 191 $ 719 1,505 Required: Answer each of the following questions independently (each question refers to the forecast above). 1. Determine the weekly volume needed for the Flavored Coffee line to breakeven. 2. Determine the revenue needed by the Iced Coffees to generate $750 of Segment Margin. 3. Blue Mountain is considering increasing the price of the Coffee Bean packages. Determine the price necessary for that product line to generate $750 of Segment Margin. 4. The store needs to replace their Latte machine. The new machine will result in $26 additional weekly direct fixed costs. How many additional Lattes will they need to sell to keep Segment Margin unchanged? 5. Determine the weighted average contribution margin ratio (WACM %) for Blue Mountain Coffee. 6. Assuming sales mix remains constant, how much revenue in total is needed for Blue Mountain Coffee to breakeven? 7. Assuming sales mix remains constant, determine the revenue from each product line that is needed to generate $1,000 after-tax income. Blue Mountain Coffee Company sells three coffee products to go (flavored, lattes, and iced coffees). Additionally, they sell their private label coffee beans whole or ground. Their store fronts are small with no seating-providing only walk-up service generally located in outdoor walking/shopping districts. The P&L Statement below shows one store's weekly budget. Additional information is provided below. Use the worksheet to help answer the questions. Blue Mountain Coffee Company Forecast P&L - Week 1, March 2024 Flavored Coffees (12 oz) Lattes (20 oz) Iced Coffees (1602) Revenue $1,500 $6.00 $3,000 $6.00 $2,700 $4.50 $2,100 Coffee Beans $20.00 Total $9,300 Variable costs (ingredients) 600 2.00 2000 4.00 1,950 3.25 840 8.00 5,390 Contribution margin $900 $3.00 $1,000 $2.00 $750 $1.25 $1,200 $12.00 $3,910 Direct Fixed costs $450 $450 $625 $1,000 Segment Margn $450 $550 $1251 $260 $2.525 $1,385 Fixed operating expenses (rent marketing, labor) 475 Pre-tax operating income Income taxes @21% After-tax income Operating Data 1. Weekly volume 300 500 600 105 $ 010 In on $ 191 $ 719 1,505 Required: Answer each of the following questions independently (each question refers to the forecast above). 1. Determine the weekly volume needed for the Flavored Coffee line to breakeven. 2. Determine the revenue needed by the Iced Coffees to generate $750 of Segment Margin. 3. Blue Mountain is considering increasing the price of the Coffee Bean packages. Determine the price necessary for that product line to generate $750 of Segment Margin. 4. The store needs to replace their Latte machine. The new machine will result in $26 additional weekly direct fixed costs. How many additional Lattes will they need to sell to keep Segment Margin unchanged? 5. Determine the weighted average contribution margin ratio (WACM %) for Blue Mountain Coffee. 6. Assuming sales mix remains constant, how much revenue in total is needed for Blue Mountain Coffee to breakeven? 7. Assuming sales mix remains constant, determine the revenue from each product line that is needed to generate $1,000 after-tax income.
Expert Answer:
Answer rating: 100% (QA)
Blue Mountain Coffee Company PL Analysis 1 Breakeven volume for Flavored Coffee Let x be the number of Flavored Coffees needed to breakeven Variable cost per Flavored Coffee 060 from PL statement Pric... View the full answer
Related Book For
Posted Date:
Students also viewed these accounting questions
-
Blue Mountain Coffee Company sells two different coffees-to-go (flavored coffees and iced coffees). Additionally, they sell their private label ground coffee. Their store fronts are very small with...
-
Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...
-
A card is drawn at random from a deck of 52 playing cards. Find the probability that it is a club or a king.
-
What amount must be invested today to provide for quarterly payments of $2500 at the end of every quarter for 15 years after a six-year deferral period? Assume that the funds will earn 5% compounded...
-
A paddle wheel rotates at 200 rpm in a substance. Determine the power transmitted by the shaft and the work it inputs into the substance in 20 minutes if it requires 4 N m to rotate the wheel.
-
Use the \(f\)-chart to determine the amount of solar energy that can be delivered in Little Rock, AR, in January for the following solar and building conditions: Building Load: 40 million Btu/month...
-
Sharp Paper Inc. has three paper mills, one of which is located in Memphis, Tennessee. The Memphis mill produces 300 different types of coated and uncoated specialty printing papers. This large...
-
As illustrated opposite, a rope passing through a system of pulleys C, D, E is attached at B to a rod OA of length L - 10cm and mass m = 1500g connected to a pivot at O. A mass m1 suspended from...
-
Daniel just inherited some farmland he wants to sell. Buyer 1 is offering $60,000, but wants Daniel to keep the land for 5 years before they can pay him for the land. Buyer 2 is offering $40,000 to...
-
Coleen works for a newspaper in Hamilton, Ontario. Last year ( 2 0 2 2 ) , Coleen expects to earn $ 4 2 , 0 0 0 . How much would she have been required to contribute to CPP ? Ignore the employer...
-
The accountant for Scott Industries prepared the following list of account balances from the company's records for the year ended December 31: Fees Earned $165,000 Cash $30,000 Accounts Receivable...
-
Sharing a compelling idea that could help lower or even prevent drunk driving among teens., provide a concrete idea and follow it up with actionable steps that could be taken.?
-
In your own words, define the following types of reporting entities/structures and provide at least one example. a. Dual-listed entities b. Parent, child, grandchild group structures c. Partially...
-
Lindenwood University, a private university in Saint Charles, Missouri joined the NCAA's Division I level in the Fall of 2022. In December 2023, it announced that it was eliminating ten varsity...
-
You have been approached by the editor of Gentlemens Magazine to carry out a research study. The magazine has been unsuccessful in attracting shoe manufacturers as advertisers. When the sales force...
-
Consider the circuit of Fig. 7.97. Find v0 (t) if i(0) = 2 A and v(t) = 0. 1 3 ett)
-
According to the monetary approach to the balance of payments, what type of economic policies would help a country resolve a balance of trade deficit?
-
We discussed risk aversion as being descriptive of investor behavior. Can Do you think of any real-world behavior that you might consider to be evidence of the existence of risk preferrers?
-
Pick three developing countries and create a country risk index for them. Rank them ordinally in terms of factors that you can observe (exports, GDP growth, reserves, etc.) by looking at...
Study smarter with the SolutionInn App