Archer's

Beanery is a locally owned specialty food product company in Northeast Ohio that has been in existence for over 30 years. Its products include flavored coffees and teas, dips, dressings, sauces, and seasonings.

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Each of the shows that

Archer's

attends has a different booth rental fee. Booth rental fees can range from

$700

to

$5,000

for each show. Assume that the booth rental fee at the Great Big Home + Garden Show is

$2,375

for the

five-day

show and that

Archer's

has an average contribution margin ratio of

25%

on its products.Read the requirements

.

Requirement 1. How much in sales does

Archer's

need to break even on the Great Big Home + Garden Show, assuming that the booth rental fee is the only fixed cost of the show?

Identify the formula and then compute the breakeven point in dollars. (Complete all answer boxes. Enter a "0" for any zero amounts. Enter ratios, if any, as a decimal to two places, X.XX.)

							Breakeven sales
(	Fixed expenses	+	Operating income	)	Contribution margin ratio	=	in dollars
(		+		)		=

Requirement 2. The Great Big Home + Garden Show runs for

five

days. How much, on average, must

Archer's

sell each day of the show to break even?

Archer's must sell

0

each day to break even.

Requirement 3. Assume that

75,000

people visit the home and garden show each year spread evenly throughout the

five-day

period. If

8%

of the attendees purchase from

Archer's

at the show, how much must each customer purchase from

Archer's

for the company to break even on the booth rental fee?

Identify the formula and then compute the purchase amount needed per customer. (Round your answer to the nearestcent.)

Breakeven sales in dollars		Total number of customers	=	Purchase amount per customer
			=

Requirement 4. Assume now that

Archer's

wants to make a target profit of

$2,500

for the Great Big Home + Garden Show. What sales volume will allow

Archer's

to achieve this target profit?

Archer's sales volume must be

0

to achieve the target profit.