Use the below table to answer the following questions. Selling Price = $28.00 Sales Volume Fixed...

 

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Use the below table to answer the following questions. Selling Price = $28.00 Sales Volume Fixed Variable 2,000 3,000 4,000 5,000 6,000 Cost Cost Profitability $20,000 11 $ 14,000 $31, 000 $48,000 $65,000 $82,000 20,000 20,000 30,000 30,000 30,000 40,000 40,000 40,000 12 12,000 28,000 44,000 60,000 76,000 55,000 70,000 55,000 72,000 50,000 66,000 45,000 60,000 45,000 62,000 40,000 56,000 35,000 50,000 13 10,000 25,000 40,000 4,000 21,000 38,000 2,000 18,000 34,000 15,000 30,000 (6,000) 11,000 28,000 (8,000) 8,000 24,000 (10,000) 5,000 20,000 11 12 13 11 12 13 Required a. Determine the sales volume, fixed cost, and variable cost per unit at the break-even point. b. Determine the expected profit if Bright Day projects the following data for Delatine: sales, 4,000 bottles; fixed cost, $20,000; and variable cost per unit, $13. c. Bright Day is considering new circumstances that would change the conditions described in Requirement B. Specifically, the company has an opportunity to decrease variable cost per unit to $11 if it agrees to conditions that will increase fixed cost to $30,000. Volume is expected to remain constant at 4,000 bottles. Determine the effects on the company's profitability if this opportunity is accepted. Use the below table to answer the following questions. Selling Price = $28.00 Sales Volume Fixed Variable 2,000 3,000 4,000 5,000 6,000 Cost Cost Profitability $20,000 11 $ 14,000 $31, 000 $48,000 $65,000 $82,000 20,000 20,000 30,000 30,000 30,000 40,000 40,000 40,000 12 12,000 28,000 44,000 60,000 76,000 55,000 70,000 55,000 72,000 50,000 66,000 45,000 60,000 45,000 62,000 40,000 56,000 35,000 50,000 13 10,000 25,000 40,000 4,000 21,000 38,000 2,000 18,000 34,000 15,000 30,000 (6,000) 11,000 28,000 (8,000) 8,000 24,000 (10,000) 5,000 20,000 11 12 13 11 12 13 Required a. Determine the sales volume, fixed cost, and variable cost per unit at the break-even point. b. Determine the expected profit if Bright Day projects the following data for Delatine: sales, 4,000 bottles; fixed cost, $20,000; and variable cost per unit, $13. c. Bright Day is considering new circumstances that would change the conditions described in Requirement B. Specifically, the company has an opportunity to decrease variable cost per unit to $11 if it agrees to conditions that will increase fixed cost to $30,000. Volume is expected to remain constant at 4,000 bottles. Determine the effects on the company's profitability if this opportunity is accepted.

Answer rating: 100% (QA)

Break even point where profit is 0 Sales Volume 2000 Fixed Cost ... View the full answer