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 2 years ago
Next > < Previous

Related Solutions

1. Given the following, depict fully and explain break-even in units, break-even in dollars, total revenue...
1. Given the following, depict fully and explain break-even in units, break-even in dollars, total revenue line, total cost line, fixed cost line, break-even point, etc. Fixed Cost: $120,000 Sales per Unit: $15.00 Variable cost per Unit: $3.00 Include a discussion regarding sensitivity analysis for an inelastic product.
The break-even point tells a company the number of units or the amount of revenue that...
The break-even point tells a company the number of units or the amount of revenue that it must sell or earn in order to pay for all of its costs. At this point, the company has neither profit nor loss. Companies have two main types of costs: variable costs and fixed costs. Variable costs are those costs that vary with the number of units produced. Examples of variable costs are direct labor, direct materials and overhead. Fixed costs are those...
Determine the (a) break-even point in sales units and (b) break-even point in sales units assuming that the selling price is increased to $67 per unit
Nicolas Enterprises sells a product for $60 per unit. The variable cost is $35 per unit, while fixed costs are $80,000. Determine the (a) break-even point in sales units and (b) break-even point in sales units assuming that the selling price is increased to $67 per unit
Break-Even Sales Under Present and Proposed Conditions Portmann Company, operating at full capacity, sold 1,000,000 units...
Break-Even Sales Under Present and Proposed Conditions Portmann Company, operating at full capacity, sold 1,000,000 units at a price of $188 per unit during the current year. Its income statement is as follows: Sales         $188,000,000 Cost of goods sold         (98,000,000) Gross profit         $90,000,000 Expenses:            Selling expenses   $14,000,000         Administrative expenses   17,800,000         Total expenses         (31,800,000) Operating income         $58,200,000 The division of costs between variable and...
Break-Even Sales Under Present and Proposed Conditions Darby Company, operating at full capacity, sold 163,500 units...
Break-Even Sales Under Present and Proposed Conditions Darby Company, operating at full capacity, sold 163,500 units at a price of $66 per unit during the current year. Its income statement is as follows Sales $10,791,000 Cost of goods sold 3,828,000 Gross profit $6,963,000 Expenses: Selling expenses $1,914,000 Administrative expenses 1,144,000 Total expenses 3,058,000 Income from operations $3,905,000 The division of costs between variable and fixed is as follows: Variable Fixed Cost of goods sold 60% 40% Selling expenses 50% 50%...
Break-Even Sales Under Present and Proposed Conditions Darby Company, operating at full capacity, sold 97,700 units...
Break-Even Sales Under Present and Proposed Conditions Darby Company, operating at full capacity, sold 97,700 units at a price of $93 per unit during the current year. Its income statement is as follows Sales  $9,086,100Cost of goods sold  3,224,000Gross profit  $5,862,100Expenses:   Selling expenses$1,612,000  Administrative expenses961,000  Total expenses  2,573,000Income from operations  $3,289,100 The division of costs between variable and fixed is as follows:  VariableFixedCost of goods sold60% 40% Selling expenses50% 50% Administrative expenses30% 70%  Management is considering a plant expansion program for the following year that will permit an increase of $744,000 in yearly...
Break-Even Sales Under Present and Proposed Conditions Darby Company, operating at full capacity, sold 167,200 units...
Break-Even Sales Under Present and Proposed Conditions Darby Company, operating at full capacity, sold 167,200 units at a price of $111 per unit during the current year. Its income statement is as follows: Sales $18,559,200 Cost of goods sold 6,586,000 Gross profit $11,973,200 Expenses: Selling expenses $3,293,000 Administrative expenses 1,961,000 Total expenses 5,254,000 Income from operations $6,719,200 The division of costs between variable and fixed is as follows: Variable Fixed Cost of goods sold 60% 40% Selling expenses 50% 50%...
Break-Even Sales Under Present and Proposed Conditions Darby Company, operating at full capacity, sold 139,000 units...
Break-Even Sales Under Present and Proposed Conditions Darby Company, operating at full capacity, sold 139,000 units at a price of $72 per unit during the current year. Its income statement is as follows: Sales $10,008,000 Cost of goods sold 3,552,000 Gross profit $6,456,000 Expenses: Selling expenses $1,776,000 Administrative expenses 1,056,000 Total expenses 2,832,000 Income from operations $3,624,000 The division of costs between variable and fixed is as follows: Variable Fixed Cost of goods sold 60% 40% Selling expenses 50% 50%...
Break-Even Sales Under Present and Proposed Conditions Portmann Company, operating at full capacity, sold 1,000,000 units...
Break-Even Sales Under Present and Proposed Conditions Portmann Company, operating at full capacity, sold 1,000,000 units at a price of $188 per unit during the current year. Its income statement is as follows: Sales $188,000,000 Cost of goods sold (100,000,000) Gross profit $88,000,000 Expenses: Selling expenses $16,000,000 Administrative expenses 12,000,000 Total expenses (28,000,000) Operating income $60,000,000 The division of costs between variable and fixed is as follows: Variable Fixed Cost of goods sold 70% 30% Selling expenses 75% 25% Administrative...
Break-Even Sales Under Present and Proposed Conditions Battonkill Company, operating at full capacity, sold 105,400 units...
Break-Even Sales Under Present and Proposed Conditions Battonkill Company, operating at full capacity, sold 105,400 units at a price of $57 per unit during 2014. Its income statement for 2014 is as follows: Sales $6,007,800 Cost of goods sold 2,128,000 Gross profit $3,879,800 Expenses: Selling expenses $1,064,000 Administrative expenses 646,000 Total expenses 1,710,000 Income from operations $2,169,800 The division of costs between fixed and variable is as follows: Fixed Variable Cost of goods sold 40% 60% Selling expenses 50% 50%...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT