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(Data for questions 4, 5 and 6) Vigne Rond owns a vineyard that produces 80,000 liters of wine per season. She sells all her production
(Data for questions 4, 5 and 6) Vigne Rond owns a vineyard that produces 80,000 liters of wine per season. She sells all her production at a price of $ 2 per liter to the company Mixit which makes wine blends. Vigne Rond is exploring the possibility of bottling and selling 30,000 liters of wine itself directly to the LCBO (the company that controls and sells wine in Ontario). The LCBO would purchase the wine for $ 5.00 per 750 ml bottle. To do this, Vigne Rond will have to buy the empty 750 ml bottles at a price of $ 1.50 per bottle and incur FIF (variable) of $ 0.75 per bottle. She will also have to rent a warehouse to age her wine for 12 months at a cost of $ 600 per month. Rental of all bottling equipment is $ 10,000 for the production season. All other costs are irrelevant. What is the breakeven point of this new initiative expressed in dollars? What will be the differential income from this analysis? What would Vigne Rond's incremental benefit be if it went ahead with this project?
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