BU Canteen operates vending machines with monthly fixed expenses as follow: $4,000 1,000 600 160 The...

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BU Canteen operates vending machines with monthly fixed expenses as follow: $4,000 1,000 600 160 The vending machines sell drinks with average unit selling price as $7 and unit cost per can as $4. Required: i) ii) iii) iv) Machine rental Space rental Part-timer to take care of the machines Other fixed costs v) Calculate the monthly breakeven point in units (cans). (6 marks) If 2,500 cans are sold, what would be the net income? What is the degree of operating leverage (round to one decimal point)? (11 marks) With target profit of $240, what is the target sales dollar? (10 marks) The supplier of the vending machines would like to rearrange the deal by charging $2 per can sold (new mode), instead of renting the machines to BU Canteen at monthly rental of $4,000 (existing mode). Do you recommend BU Canteen to take the deal (new mode) so as to maximize its income, assuming 3,000 cans can be sold per month? (13 marks) Assuming the estimated demand would be less than 2,000 cans next year and the canteen operator is risk averse, will the decision in (iv) change based on operating leverage analysis (round to one decimal point)? (10 marks) BU Canteen operates vending machines with monthly fixed expenses as follow: $4,000 1,000 600 160 The vending machines sell drinks with average unit selling price as $7 and unit cost per can as $4. Required: i) ii) iii) iv) Machine rental Space rental Part-timer to take care of the machines Other fixed costs v) Calculate the monthly breakeven point in units (cans). (6 marks) If 2,500 cans are sold, what would be the net income? What is the degree of operating leverage (round to one decimal point)? (11 marks) With target profit of $240, what is the target sales dollar? (10 marks) The supplier of the vending machines would like to rearrange the deal by charging $2 per can sold (new mode), instead of renting the machines to BU Canteen at monthly rental of $4,000 (existing mode). Do you recommend BU Canteen to take the deal (new mode) so as to maximize its income, assuming 3,000 cans can be sold per month? (13 marks) Assuming the estimated demand would be less than 2,000 cans next year and the canteen operator is risk averse, will the decision in (iv) change based on operating leverage analysis (round to one decimal point)? (10 marks)