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Part $1$

NolanNolan

HoffmanHoffman

is evaluating a business opportunity to sell

premium car waxpremium$$car$$wax

at vintage car shows. The wax is sold in$64-$ounce tubs.

NolanNolan

can buy the

premium waxpremium$$wax

at a wholesale cost of

$ $37$$$37$

per tub. He plans to sell the

premium waxpremium$$wax

for

$ $70$$$70$

per tub. He estimates fixed costs such as travel$$ costs, booth rental$$ cost$,$ and lodging to be

$ $759$$$759$

per car show.

Read the

requirements

LOADING...

$.$

Question content area bottom

Part $1$

Requirement $1.$ Determine the number of tubs

NolanNolan

must sell per show to break even.

Begin by identifying the formula to compute the sales in units at various levels of operating income using the contribution margin approach.

$($

Fixed expenses

$+$

Operating income

$)$

Contribution margin per unit

$=$

Sales in units

Part $2$

Nolan must sell

$23$

tubs per show to breakeven.

Part $3$

Requirement $2$a$.$ Determine the sales volume in units necessary to earn the desired profit assuming

NolanNolan

wants to earn a profit of

$$$$759759$

per show.

Nolan must sell

$46$

tubs per show to earn a profit of $$759$ per show.

Part $4$

b$.$ Determine the sales volume in dollars necessary to earn the desired profit assuming

NolanNolan

wants to earn a profit of

$$$$759759$

per show.

Begin by identifying the formula to compute the sales volume in dollars necessary to earn the desired profit.

$($

Fixed expenses

$+$

$$

$)$

$$

$=$

Breakeven sales in dollars