Question

In: Statistics and Probability

Calculate the break-even sales revenue and units for the 500 mL bottle and the proposed 2L...

  1. Calculate the break-even sales revenue and units for the 500 mL bottle and the proposed 2L bottle. Calculate the net profit for the sales target of 10,000, 12,500 and 15,000 units of each product size.
  2. What do you recommend that Kai should do with his product line? Stick to 500 mL only? Add 2L as new size? Other suggestions?
  3. Do you agree with the online promotional and distribution strategy Kai is considering? What recommendations for improvement would you suggest?

  4. Selling Price               $9.00 – 500 mL           $16.00 – 2L

    Variable Costs - Costs Per Bottle

    Ingredients                  $1.50                           $3.00

    Bottle/label                    .50                           1.00

                                        $2.00                           $4.00

    Annual Fixed Costs

    Labour

    (2x $14 x 40 x 52)       $58,240

    Rent                            15,000

    Promotion                     5,000

    Occupancy costs             6,000

    Total Fixed Costs        $84,240                      

Solutions

Expert Solution

orchestra answered 1 year ago
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