Question
The Market is a merchandiser of organic food items. The company is considering the possibility of selling oranges that would sell for $0.59 each. Oranges
The Market is a merchandiser of organic food items. The company is considering the possibility of selling oranges that would sell for $0.59 each. Oranges can be acquired in unlimited quantities for $0.43 each. There are no additional variable costs associated with acquiring and selling oranges since labor is on a salaried basis. However, in order to acquire oranges this price, the Market must pay $3,000 per year for membership in an International co-op.
a) How many Oranges would The Market need to sell annually to justify joining the co-op (break-even)?
b) What would be the total revenue at the break-even point?
c) How many Oranges would the company need to sell to earn a profit of $5,000?
d) If Oranges cost were $0.51 instead of $0.43, how many Oranges would need to be sold in order to earn the same $5,000?
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