Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Selling Price = $28.00 Variable 2,000 6,000 12 Fixed Cost $20,000 20,000 20,000 30,000 30,000 30,000 40,000 40,000 40,000 $ 14,000 12,000 10,000 4,000 2,000
Selling Price = $28.00 Variable 2,000 6,000 12 Fixed Cost $20,000 20,000 20,000 30,000 30,000 30,000 40,000 40,000 40,000 $ 14,000 12,000 10,000 4,000 2,000 Sales Volume 3,000 4,000 5,000 Profitability $ 31,000 $ 48,000 $ 65,000 28,000 44,000 60,000 25,000 40,000 55,000 21,000 38,000 55,000 18,000 34,000 50,000 15,000 30,000 45,000 11,000 28,000 45,000 8,000 24,000 40,000 5,000 20,000 35,000 $ 82,000 76,000 70,000 72,000 66,000 60,000 62,000 56,000 50,000 (6,000) (8,000) (10,000) Required a. Determine the sales volume, fixed cost, and variable cost per unit at the break-even point. b. Determine the expected profit if Bright Day projects the following data for Delatine: sales, 4,000 bottles, fixed cost, $20,000; and variable cost per unit, $13. c. Bright Day is considering new circumstances that would change the conditions described in Requirement B. Specifically, the company has an opportunity to decrease variable cost per unit to $11 if it agrees to conditions that will increase fixed cost to $30,000. Volume is expected to remain constant at 4,000 bottles. Determine the effects on the company's profitability if this opportunity is accepted
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started