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Part A Foamy Ltd. plans to produce a coffee-based drink called Alert. It is anticipated that variable costs will amount to 40p per drink. The

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Part A Foamy Ltd. plans to produce a coffee-based drink called Alert. It is anticipated that variable costs will amount to 40p per drink. The company will produce Alert in a processing facility with a capacity to produce 200,000 drinks a year. Fixed costs are anticipated to be 100,000 per year. The company plans to supply to retailers at a price of 95p per drink. Required: a. Calculate the break-even volume, at the expected price, to retailers. (4 marks) b. Calculate the break-even sales price to retailers if the factory is used at full capacity. (6 marks)

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