Suppose you have decided to start a small business selling snacks from vending machines. You have secured a location for one candy vending machine in a local bookstore. Rental for the space will cost $200 per month.

Vending machines can be purchased at wholesale clubs such as Sams Club and Costco. You can also purchase the snacks to stock the machines in bulk there.

REQUIRED:

Assume your machine can accommodate more than one product, for example, a snack machine that can dispense both chips and candy bars or a drink machine that offers both soda and water. The products should have different prices, variable costs, and contribution margins. Perform the analyses for three levels of sales mix: 50/50, 30/70, and 70/30.

Beverage choice: Coke Zero & Water

Cost of vending machine: $4500

Coke Zero

Coke Zero in bulk: $22.99 for 35 cans

Cost per can: 22.99/35 = $0.66

Will charge $1.50 for each can

Contribution Margin: 1.5-0.66 = $0.84

To cover the cost of the vending machine: 4500 /.84 = 5357

Monthly break-even point in bars: 200/.84 = 238 (rounded to nearest whole number)

Monthly break-even point in sales: 238*1.5 = $357

Water

Water in bulk: $4.98 for 32 bottles

Cost per bottle: 4.98/32 = $0.16

Will charge $1.50 for each bottle

Contribution Margin: 1.5-0.16 = 1.34

To cover the cost of the vending machine: 4500/1.34 = 3358 (rounded to nearest whole number

Monthly break-even point in bars: 200/1.34 = 149 (rounded to nearest whole number)

Monthly break-even point in sales: 149*1.5 = $223.5

NEED HELP WITH THE FOLLOWING:

Perform the analyses for three levels of sales mix: 50/50, 30/70, and 70/30.