# Question

Vendmart Food Services Company operates and services snack vending machines located in restaurants, gas stations, and factories in four southwestern states. The machines are rented from the manufacturer. In addition, Vendmart must rent the space occupied by its machines. The following expense and revenue relationships pertain to a contemplated expansion program of 80 machines.

Fixed monthly expenses follow:

Machine rental: 80 machines @ $22.10 ....... $1,768

Space rental: 80 locations @ $20.00 ....... 1,600

Part-time wages to service the additional 80 machines . 500

Other fixed costs ................. 132

Total monthly fixed costs ........... $4,000

Other data follow:

These questions relate to the given data unless otherwise noted. Consider each question independently.

1. What is the monthly break-even point in number of units (snacks)? In dollar sales?

2. If 45,000 units were sold, what would be the company’s net income?

3. If the space rental cost was doubled, what would be the monthly break-even point in number of units? In dollar sales?

4. Refer to the original data. If, in addition to the fixed space rent, Vendmart Food Services Company paid the vending machine manufacturer $.07 per unit sold, what would be the monthly break-even point in number of units? In dollar sales?

5. Refer to the original data. If, in addition to the fixed rent, Vendmart paid the machine manufacturer $.11 for each unit sold in excess of the break-even point, what would the new net income be if 45,000 units weresold?

Fixed monthly expenses follow:

Machine rental: 80 machines @ $22.10 ....... $1,768

Space rental: 80 locations @ $20.00 ....... 1,600

Part-time wages to service the additional 80 machines . 500

Other fixed costs ................. 132

Total monthly fixed costs ........... $4,000

Other data follow:

These questions relate to the given data unless otherwise noted. Consider each question independently.

1. What is the monthly break-even point in number of units (snacks)? In dollar sales?

2. If 45,000 units were sold, what would be the company’s net income?

3. If the space rental cost was doubled, what would be the monthly break-even point in number of units? In dollar sales?

4. Refer to the original data. If, in addition to the fixed space rent, Vendmart Food Services Company paid the vending machine manufacturer $.07 per unit sold, what would be the monthly break-even point in number of units? In dollar sales?

5. Refer to the original data. If, in addition to the fixed rent, Vendmart paid the machine manufacturer $.11 for each unit sold in excess of the break-even point, what would the new net income be if 45,000 units weresold?

## Answer to relevant Questions

Upcraft Moving Company specializes in hauling heavy goods over long distances. The company’s revenues and expenses depend on revenue-miles, a measure that combines both weights and mileage.Summarized budget data for next ...At a seminar, a cost accountant spoke on identification of different kinds of cost behavior. Tammy Li, a hospital administrator who heard the lecture, identified several hospital costs of concern to her. After her ...Study Appendix 2B. Given a target after-tax net income, present the CVP formula for computing the income before income taxes.Explain how mixed costs are related to both fixed and variable costs.North Manchester Foundry produced 55,000 tons of steel in March at a cost of £1,150,000. In April, the foundry produced 35,000 tons at a cost of £950,000. Using only these two data points, determine the cost function for ...Post your question

0