Use Exhibit 3.3 shown in the body of the chapter to answer the following questions.

a. Determine the sales volume, fixed cost, and variable cost per unit at the break-even point.
b. Determine the expected profit if Bright Day projects the following data for Delatine: sales, 4,000 bottles; fixed cost, $20,000; and variable cost per unit, $13.
c. Bright Day is considering new circumstances that would change the conditions described in Requirement b. Specifically, the company has an opportunity to decrease variable cost per unit to $11 if it agrees to conditions that will increase fixed cost to $30,000. Volume is expected to remain constant at 4,000 bottles. Determine the effects on the company’s profitability if this opportunity is accepted.

  • CreatedFebruary 07, 2014
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