All-Day Candy Company is a wholesale distributor of candy. The company services grocery, convenience, and drug stores in a large metropolitan area.

All-Day Candy Company has achieved small but steady growth in sales over the past few years, but prices have also been increasing. The company is formulating its plans for the coming fiscal year. The following data were used to project the current year's after-tax operating income of $969,600:

The expected annual sales volume (780,000 boxes) is $6,240,000 and the tax rate is 40%.
Candy manufacturers have announced that they will increase the prices of their products by an average of 15% in the coming year be- cause of increases in raw material (sugar, cocoa, peanuts, and so on) and labour costs. All-Day Candy Company expects that all other costs will remain at the same rates or levels as during the current year.
Instructions
(a) Calculate All-Day Candy Company's break-even point in boxes of candy for the current year.
(b) Calculate the selling price per box that All-Day Candy Company must charge to cover the 15% increase in the variable cost of candy and still maintain the current contribution margin ratio.
(c) Calculate the volume of sales in dollars All-Day Candy Company must achieve in the coming year to keep the same operating income after taxes that was projected for the current year if the selling price of candy remains at $8 per box and the cost of candy increases by 15%.

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Average selling price Average variable costs $8.00 per box Cost of candy Selling expenses $4.00 per box 0.80 per box $4.80 per box Total Annual fixed costs Selling Administrative $320,000 560,000 $880,000 Total