Question

1. The Go Koozies Company sells Koozies at football games. There are 12 games each year. The Go Koozie Sales team typically sells 1,000 koozies per game at $7 a piece. What is Total Revenue expected for ABC Company.

2. Go Koozies purchases the koozies for $1.50 per Koozie and then pays a company .25 per Koozie to add graphics for each game. What is the Variable Cost?

3. Go Koozie pays $25,000 a year in rent and $12,000 in Payroll. Selling 12,000 Koozies. What is Go Koozies Total Cost?

4. What is Go Koozie's Break-Even point?

5. If Go Koozie wants to make a target profit of $25000, based on demand of 15000, what price should they sell the koozie to achieve their target Profit?

Answer 1

Calculation of Total Expected Revenue
Total Expected Revenue= Total Koozies Sell per Game *No. of Games per Year* Sale Price Per Piece
Total Expected Revenue= 1000*12*$7
Total Expect Revenue=$84000
2.)
Calculation of   Variable Cost Per piece
Variable Cost Per Piece=Purchase cost of Koozie Per Piece + Graphics Cost Per Piece
Variable Cost Per Piece= $1.50 + $0.25
Variable Cost Per Piece= $1.75
Calculation of Total Variable Cost
Total Variable Cost= Total Koozies Sell per Game *No. of Games per Year* Variable Cost Per Piece
Total Variable Cost= 1000*12*$1.75
Total Variable Cost= $21000
3.)
Calculation of Total Cost
Particulars	Amount
(A) Total Variable Cost (Calculated in Part 2 Above)	$         21,000.00
(B) Rent	$         25,000.00
(C )Payroll	$         12,000.00
(D) Selling	$         12,000.00
(E)Total Fixed Cost [B+C+D]	$         49,000.00
(F)Total Cost [A+E]	$         70,000.00
4.)
Calculation Break Even Point
Particulars	Amount
(A) Sale Price Per Piece	$                    7.00
(B) Variable Cost Per Piece (Calculated in Part 2 Above)	$                    1.75
(C ) Contribution Per Piece(A-B)	$                    5.25
(D) Total Fixed Cost (Calculated in Part 3 Above)	$         49,000.00
(E ) Breakeven Point (D/C) (approx)	9333.33
5.)
Calculation of Sale Price
Particulars	Amount
(A) Total Fixed Cost (Calculated in Part 3 Above)	$         49,000.00
(B) Total Variable Cost (15000 units*$1.75 )	$         26,250.00
(C ) Profit Required	$         25,000.00
(D) Total Sale Value(A+B+C)	$     1,00,250.00
(E) No. of Units	15000
(F) Sale Price Per Unit (D/E) (approx)	$                    6.68