Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

7-Joe Kunkle has decided to quit his $120,000 a year job and has a net $500,000 from a stock option payout. His passion is microbrewing

7-Joe Kunkle has decided to quit his $120,000 a year job and has a net $500,000 from a stock option payout. His passion is microbrewing and wants to open Joe's Brews in his neighborhood. The equipment could be resold for $75,000 if he abandons the venture. The initial build-out of store is $75,000 of equipment only and the landlord will make all other improvements. The owner believes that the selling price per unit is $18 and the variable costs will average $9.50. If the annual fixed costs are $82,000, then how many beers are need to break-even for Joe's Brews and provide the same wage replacement as his former job assuming a 360 day work year?

Group of answer choices

a-83 beers per day (rounded)

b-64 beers per day (rounded)

c-42 beers per day (rounded)

d-None of the above.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

ISE Managerial Accounting Creating Value In A Dynamic Business Environment

Authors: Ronald Hilton, David Platt

12th Edition

1260566390, 9781260566390

More Books

Students also viewed these Accounting questions

Question

LO2 Discuss the constraints faced in a typical recruitment process.

Answered: 1 week ago