A company produces bags of candy in their manufacturing facilities in Vancouver and have 4 factory managers. The company sells each large bag of candy for $12 and the costs are indicated below: Sugar $2.25 per bag Chocolate $0.50 per bag Other $0.25 per bag Rent $8,000 per year Salaries $65,000 per manager Utilities $35,000

The company also pays ones of it's factory managers a bonus of $3.50 per bag.

Required: 8 marks

A) Calculate the breakeven point in both quantity and sales dollars.

B) If the company wants to earn a profit of $420,000 how many units will it need to sell?

C) The company is considering entering into a maintenance contract with the following mixed costs that are calculated based on the number of units they are planning to produce each month next year. Calculate the variable component and the fixed component of this mixed cost:

Answer rating: 100% (QA)

A To calculate the breakeven point we need to find the point where total revenue equals total costs ... View the full answer