Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please show work. lceLess is an anti-icing solution sold in gallon plastic jugs. It is poured into the windshield washer bottle of your car. Wash

Please show work.

image text in transcribed

lceLess is an anti-icing solution sold in gallon plastic jugs. It is poured into the windshield washer bottle of your car. Wash your windshield and the solution prevents the glass from icing over for about four hours. Production incurs the following fixed and variable costs. It is priced initially at $5.50 per gallon. Fixed costs (per year Rent Utilities Managerial salaries Variable Costs per gallon Glycol $18000 13200 20000 12000 2400 $65600 $1.50 Mfg labor Packagin!g Inert ingredients Advertising 20 20 60 30 $3.30 Other fixed expense Total fixed Total 1. What is the annual breakeven production quantity (use above data, show work)? 2. What revenue would the sale of the breakeven quantity for $5.50 per gallon generate? 3. The production department says 29000 gallons is its maximum production capability. Management insists on earning $94400 above fixed costs. All costs are as given initially. What price must be charged per gallon if only 29000 gallons can be produced and also $94400 above fixed costs is earned? (show your calculations) 4. EMERGENCY! Production just informed management that one of its five glycol squeezers has been destroyed by a rogue computer virus. Production capability is now only 23000 gallons at most. The squeezer cannot be fixed and lceless cannot afford a replacement. This breakdown will NOT lower fixed costs. This breakdown will not change variable cost per unit, either. If only 23000 gallons are produced, and the earning target remains $94400 above fixed costs, what price per gallon must now be charged? (show your calculations)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Modeling Using Excel And VBA

Authors: Chandan Sengupta

1st Edition

0471267686, 978-0471267683

More Books

Students also viewed these Finance questions

Question

=+c) Compute the RRRs. Which action is preferred based on the RRRs?

Answered: 1 week ago

Question

Discuss the goals of financial management.

Answered: 1 week ago