Question

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

Required
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.



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  • CreatedFebruary 07, 2014
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