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The following data is available for Milford Vinegar Co Bottles 15,000 Output level: (in units) 10,000 20,000 Sales price per bottle: Variable production costs: Fixed
The following data is available for Milford Vinegar Co Bottles 15,000 Output level: (in units) 10,000 20,000 Sales price per bottle: Variable production costs: Fixed production costs: Fixed selling and administrative costs Total costs: $18.00 $37,000 $100,000 $40,000 $177,000 $15.00 $55,500 $100,000 $40,000 $195,500 $12.00 $74,000 $100,000 $40,000 $214,000 Required 1. Calculate the unit variable cost of vinegar production and sales at each level of output Calculate the unit contribution margin per bottle 2. Prepare a contribution margin income statement that shows each level of production. Assume that the company will sell all output. At what production level is profit maximized? 3.What is Milford's Break even point in Dollar Sales and Units? 4. Analyze the pricing schedule that Milford is using Why might Milford offer a lower customer price at higher production levels
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