Managerial Acct 2 Sawyers/Jackson/Jenkins -Appendix B: The Daily Grind on page 309-311 information on problem 9 and 10

1 III. ng a new 20-ounce 9. ASSUM What is Daily Grind's break-even point in terms of the number of cups of coffee sold during the year? 10. David is contemplating adding a new 20- product for the coming year and discontin sales of the small 8-ounce cup. The new cup and sleeve cost the same as the 16-ounce cup. but cream and sugar is expected to cost $.06 der cup instead of $.04 per cup. The new extra-large cup would be priced at $2.40. David anticipates that the new sales mix would be 50% for the 12-ounce cup, 30% for the 16-ounce cup, and 20% for the new 20-ounce cup. Assume that material, labor, and overhead costs remain the same in the upcoming year. How would this change in sales mix affect the company's break- even point? David would like to increase sales in the second year of operations so that he may raise his sal- ary to $50,000 (not including $15,000 of fringe benefits) while reducing his worldoad to 40 hours per week with two paid weeks of vacation dur ing the year. Reducing his workload will require 1 III. ng a new 20-ounce 9. ASSUM What is Daily Grind's break-even point in terms of the number of cups of coffee sold during the year? 10. David is contemplating adding a new 20- product for the coming year and discontin sales of the small 8-ounce cup. The new cup and sleeve cost the same as the 16-ounce cup. but cream and sugar is expected to cost $.06 der cup instead of $.04 per cup. The new extra-large cup would be priced at $2.40. David anticipates that the new sales mix would be 50% for the 12-ounce cup, 30% for the 16-ounce cup, and 20% for the new 20-ounce cup. Assume that material, labor, and overhead costs remain the same in the upcoming year. How would this change in sales mix affect the company's break- even point? David would like to increase sales in the second year of operations so that he may raise his sal- ary to $50,000 (not including $15,000 of fringe benefits) while reducing his worldoad to 40 hours per week with two paid weeks of vacation dur ing the year. Reducing his workload will require