Cost Volume Profit (CVP) 1. Professor OBrien realized his dream and opened OBrien Vineyards. At this point, he only produces a Pinot Noir but hopes to add a new wine next year. Since he has been focused on wine making, he has not been able to keep up with the managerial accounting responsibilities. Can you help him? Here is the info youll need: OBrien Vineyards contribution format income statement for September. Sales 504,000 Variable Expenses 215,525 Fixed Expenses 91,250 Net Operating Income 197,225 OBrien Vineyards has no beginning or ending inventories. The company produced and sold 21,000 bottles last month. Price per bottle is $24.00.

l. Marketing Manager Corbin OBrien is encouraging me to advertise aggressively. He believes if we advertise on the Food Network during the holiday season, we would increase sales by 12%. Cost would be $27,000. Is this something I should consider? Please show your calculations to support your recommendation. If your decision goes against the numbers indicate why. M. Production Manager Brant OBrien believes I should use better quality grapes to make my wine. In doing so, variable cost would increase by $2.00 per bottle. Sales in bottles would increase by 385. Is this something I should consider? Please show your calculations to support your recommendation. If your decision goes against the numbers indicate why. N. OBrien Vineyards has the opportunity to sell 150 cases (1,800 bottles) to Wegmans without disturbing sales to our regular customers or fixed expenses. What price should Sales Manager Heather Kelly quote Wegmans so that OBrien Vineyards increases profits by $7,200.