The Kids Are Scouts organization believes that all of their activities are essential, and should be...

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The Kids Are Scouts organization believes that all of their activities are essential, and should be done even if they lose money. To support many activities that lose money, they need to earn a profit on cookie sales. The variable costs of the most popular cookies, the "Death-By-Chocolate Mint Creams," are $1 per box. This is a high variable cost, but they are of only the finest, most expensive ingredients. They sell these cookies for $2 per box. Some 75 percent of all boxes sold are the "Death-By- Chocolate Mint Creams." They also sell peanut butter cookies for $1.50 per box. The variable cost of peanut butter cookies is $.90 per box. No other kinds of cookies are sold. There are $100,000 of annual costs for salaries of managers, rental of factory space and cookie making equipment, ovens, etc. (a) How many boxes of each kind of cookie must be sold to break even? (b) If the Kids Are Scouts have decided that they must earn a $500,000 profit on cookie sales to maintain their other activities, how many boxes of each type of cookie must they sell? (c) Suppose that it is expected that we will fall short of the result you found in (b). That is, we do not expect to make a $500,000 profit if things go as expected. What actions can the managers take? The Kids Are Scouts organization believes that all of their activities are essential, and should be done even if they lose money. To support many activities that lose money, they need to earn a profit on cookie sales. The variable costs of the most popular cookies, the "Death-By-Chocolate Mint Creams," are $1 per box. This is a high variable cost, but they are of only the finest, most expensive ingredients. They sell these cookies for $2 per box. Some 75 percent of all boxes sold are the "Death-By- Chocolate Mint Creams." They also sell peanut butter cookies for $1.50 per box. The variable cost of peanut butter cookies is $.90 per box. No other kinds of cookies are sold. There are $100,000 of annual costs for salaries of managers, rental of factory space and cookie making equipment, ovens, etc. (a) How many boxes of each kind of cookie must be sold to break even? (b) If the Kids Are Scouts have decided that they must earn a $500,000 profit on cookie sales to maintain their other activities, how many boxes of each type of cookie must they sell? (c) Suppose that it is expected that we will fall short of the result you found in (b). That is, we do not expect to make a $500,000 profit if things go as expected. What actions can the managers take?