The management of the Hazel Nutt LLC., a producer of chocolate cream, asks You for support concerning the Break-Even Analysis for a new product. The company believes that the new created mixture of chocolate cream, refined with delicious pieces of hazelnuts and pistachios will help to stop the downturn that has appeared lately. The company provides You with the following data. 0.30 Labour 0.90 others 0.10 Fixed Costs: 750,000 EUR Maximum Capacity: 1,000,000 jars per year Expected Sales Volume: 800,000 jars per year a) At first the management asks You to calculate the break-even point as well as the net profit for the expected sales volume for the new mixture. Moreover, You decide to provide the management with an appropriate chart, to give a quick overview on the margin of safety. b)On the second day at the company, You receive a call from the top management telling You that the marketing department just finished a market analysis showing that the company would be able to sell 1,000,000 jars a year if the management would drop the price to 2.50 EUR per jar. The management believes that this is a good idea, since the company is not producing at maximum capacity. How do You evaluate the idea? c)In accordance with information from the World Nut Organization (WNO), the management of the Hazel Nutt Ltd. expects the prices for Pistachios and Hazelnuts to drop by 5% in the following year. However, the company remains stuck in endless salary negotiations with employees. A 25% increase is most likely. The management wants to know to which amount the price must be raised/can be lowered in order to achieve the same net result as in a) (expected sales volume again 800,000)?

Simple Assignment The management of the Hazel Nutt LLC., a producer of chocolate cream, asks You for support concerning the Break-Even Analysis for a new product. The company believes that the new created mixture of chocolate cream, refined with delicious pieces of hazelnuts and pistachios will help to stop the downturn that has appeared lately. The company provides you with the following data. 3.50 Selling Price per jar (EUR) Variable Costs per jar (EUR) Chocolate 0.50 Hazelnuts 0.20 Pistachios 0.30 Labour 0.90 others 0.10 Fixed Costs: 750,000 EUR Maximum Capacity: Expected Sales Volume: 1,000,000 jars per year 800,000 jars per year 20