John Smith is evaluating a business opportunity to sell premium car wax at vintage car shows....

 

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John Smith is evaluating a business opportunity to sell premium car wax at vintage car shows. The wax is sold in 64-ounce tubs. John can buy the premium wax at a wholesale cost of $30 per tub. He plans to sell the premium wax for $80 per tub. He estimates fixed costs such as travel costs, booth rental cost, and lodging to be $900 per car show. Read the requirements. Requirement 1. Determine the number of tubs John must sell per show to break even. Begin by identifying the formula to compute the sales in units at various levels of operating income using the contribution margin approach. John Smith is evaluating a business opportunity to sell premium car wax at vintage car shows. The wax is sold in 64-ounce tubs. John can buy the premium wax at a wholesale cost of $30 per tub. He plans to sell the premium wax for $80 per tub. He estimates fixed costs such as travel costs, booth rental cost, and lodging to be $900 per car show. Read the requirements. Requirement 1. Determine the number of tubs John must sell per show to break even. Begin by identifying the formula to compute the sales in units at various levels of operating income using the contribution margin approach.

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