Question: please help me to solve this question step by step Tired of not finding a summer job a third summer in a row, little Donald

please help me to solve this question step by step

please help me to solve this question step by step Tired ofnot finding a summer job a third summer in a row, little

Tired of not finding a summer job a third summer in a row, little Donald Trump Jr. (age 6) has decided to take his future into his own hands. With a s100 loan from his father (s15 interest charged up front), Donald decides to open his very own lemonade stand. Having analyzed the very competitive world of lemonade selling, he has arrived at the following cost/price information: 1 Per envelope (good for 1 jug) 2 per jug 3 per jug *Given his busy schedule, Donald decided to get his cardboard signs made by his girlfriend Ivana. She was paid 50 cents for her 6 hours of work. Each jug of lemonade can serve 20 glasses of lemonade. At a price of 25 cents a glass, each jug sold will bring in $5.00 of revenue. Having not yet studied CVP analysis at school (a suggestion his foolish kindergarten teacher ha turned down), Little Donald has come to you for help. Required: 1. How many jugs of lemonade must be sold in order to breakeven (using the 3 different methods illustrated in the text). 2. How many jugs of lemonade must be sold in order to: A) Generate an operating income of 5400. B) Generate a net income of s400 (Assume a 30% tax rate) 3. Always wanting to keep one step ahead of the competition, Little Donald decides to sell grape juice as well as lemonade at his stand. The information relating to the grape juice business is as follows. He expects to sell twice as much lemonade than grape juice. A) How many jugs of each must he sell to breakeven? B) How will the breakeven point change if the sales mix changes to 3 to 1 (3 jugs of lemonade sold for every 1 jug of grape juice sold)? 4. Out of the goodness of her heart, Little Donald's mother has decided to help her son with his business venture. She has decided to allow her son to use the kitchen freezer to make the ice that he needs for making the lemonade. She will charge $20.00 up front for this privilege no matter how much ice Little Donald makes. a. What will be the new break even point if Little Donald accepts his Mom's offer? b. What will be his profits if he sells 60 jugs of lemonade under the old cost structure and the proposed cost structure? c. What will be his profits if he sells 100 jugs of lemonade under the old cost structure and the proposed cost structure? d. At what sales level will both cost structures yield the same profits? What is this point called? e. Should Little Donald accept his Mom's offer or not

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