Use the below table to answer the following questions.

Selling price = $ 28.00

Required:
a. Determine the sales volume, fixed cost, and variable cost per unit at the break-even point.
Sales volume........................Bottles
Variable cost per unit
Fixed cost
b. determine the expected profit if Bright Day projects the following data for Delatine: sale, 4,000 bottles; fixed costs, $20,000; and variable cost per unit, $13.
Expected profit
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.
Expected profit would..............by

Transcribed Image Text:

Sales Volume Fixed Variable Cost Cost 2,000 3,000 $ 14,000 $31,000 48,000 $65,000 82,000 12 2,000 18,000 34,000 50,000 66,000 2 (6,000) ,000 28,000 45,000 62,000 (8,000) 8,000 24,000 40,000 56,000