GIVEN INFORMATION

Sugarland Vending Company operates and services snack vending machines located in restaurants, gas stations, and factories in four southwestern states. The machines are rented from the manufacturer. In addition, Sugarland must rent the space occupied by its machines. The following expense and revenue relationships pertain to a contemplated expansion program of 80 machines.

Fixed monthly expenses and other data follow:

Machine rental: 80 machines. @. $ 22.10 $. 1,768

Space Rental: 80 locations @. $.20.00 $. 1,600

Part-Time wages to service the additional 80 machines 500

Other fixed costs. 132

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Total monthly fixed costs. $ 4,000

Per Unit (Snack) per $100 of Sales

--------------------------------------------------------------------------------------------------Selling Price $ 1.00 100%

Cost of snack 0.68 68

--------------------------------------------------------Contribution Margin $. .32 32 %

NEED TO ANSWER

Requirement 1. What is the monthly break-even point in number of units (snacks)? In dollar sales?

Begin by determine the formula, and then enter the amounts to calculate the break-even in

units.

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=

Break-even in units

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Next, determine the formula and then enter the amounts to calculate the break-even point in dollar sales.

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=

Break-even in dollar sales

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Requirement 2. If 45,000 units were sold, what would be the company's net income?

Determine the formula and then enter the amounts to calculate the company's net income if 45,000 units were sold.

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x (

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) ] -

=

Net income

[

x (

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) ] -

=

Requirement 3. If the space rental cost was doubled, what would be the monthly break-even point in number of units? In dollar sales?

The break-even point is (enter your response here) units (snacks).

The break-even point in dollar sales is $(enter your response here.)

Requirement 4. Refer to the original data. If, in addition to the fixed space rent, Sugarland Vending Company paid the vending machine manufacturer $0.07 per unit sold, what would be the monthly break-even point in number of units? In dollar sales? (Round break-even units and dollar sales to the nearest whole number.)

The break-even point is (enter your response here) units (snacks).

The break-even point in dollar sales is $(enter your response here.)

Requirement 5. Refer to the original data. If, in addition to the fixed rent, Sugarland paid the machine manufacturer $.11 for each unit sold in excess of the break-even point, what would the new net income be if 45,000 units were sold?

Net income would be $(enter your response here.)