Question
Complete Protection Company sells hand sanitizers. They usually sell one bottle for $24 and buy it for $10 each. Their fixed costs is $35,000 once
Complete Protection Company sells hand sanitizers. They usually sell one bottle for $24 and buy it for $10 each. Their fixed costs is $35,000 once they sell between 0 to 20,000 bottles. If they purchase and sell more than 20,001 bottles, the fixed costs would increase to $40,000.
Requirements:
- Calculate the number of hand sanitizer bottles that needs to be sold in order to breakeven. (3 points)
- Calculate the number of hand sanitizer bottles that needs to be sold in units in order to make an operating profit of $98,000. (3 points)
- Due to COVID-19, there is a large demand for hand sanitizer and the selling price went up to $60 and the price to purchase the bottle also increased to $20 each. They also anticipate that the number of bottles sold would be above 20,000. What is the new breakeven in dollars? (4 points)
Complete Protection Company is now considering selling gloves along with hand sanitizers. They anticipate that the gloves would cost $40 per box and they can sell it for $75 each. It is expected that for every box of gloves they sell, they would also sell 4 hand sanitizers. What would be the breakeven in units for each product if fixed costs is expected to increase to $50,000?
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