Pelverata Pickles produce gourmet pickled onions. These pickled onions are sold in 750ml jars.The following data gives information about the sales revenue and costs associated with the production of these pickled onions:

Sales price per jar	$13
Variable production costs per jar	$5
Variable selling costs per jar	$3
Fixed Costs	$80,000

Required:

1. Compute the break-even point in units and sales dollars.

[5 marks]

1. How many jars of pickled onions must Pelverata Pickles sell to earn a profit of $120,000?

[5 marks]

1. If the variable production costs became $7 per jar, what would the new break-even amount be in units and sales dollars? (Note: round to the nearest unit and dollar)

[5 marks]

1. What does the term 'relevant range' mean. Give an example to support your answer

Sylvio owns a large fitness centre - Sandy Bay Fitness Club.

To become a member of the fitness centre, individuals need to sign up for membership, of which there are three levels: Gold, Silver and Bronze. Silvio has come to you for help in preparing his budgets for the next 12 months, ending 31 July 2023.

Silvio expects the number of memberships to be sold next year to be: 300 Gold, 250 Silver and 500 Bronze. The annual membership fees are $4,500 for Gold, $2,000 for Silver and $1,000 for Bronze.

Silvio has hired several employees, on various salaries, in order to run the fitness centre:

1 general manager $155,000 per year

3 coaches $85,000 each per year

2 trainers $70,000 each per year

3 administrative staff $65,000 each per year

1 medical staff $55,000 per year

Silvio expects these operating expenses for the following 12 months:

Advertising expenses $45,000

Insurance expense $90,000

Fitness supplies $30 per member per year

Rental of centre $200,000 per year

Required:

1. a Sales Budget for the year ending31 July 2023.

[5 marks]

1. a Labour Budget for the year ending31 July 2023.

[5 marks]

1. a Budgeted Income Statement for the year ending 31 July 2023.

[10 marks]

Answer rating: 100% (QA)

ANSWER Pelverata Pickles Breakeven Analysis a Breakeven Point in Units and Sales Dollars Contributio... View the full answer