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Exercise 3.32 All-Day Candy Company is a wholesale distributor of candy. The company services grocery, convenience, and drug stores in a large metropolitan area. The
Exercise 3.32 All-Day Candy Company is a wholesale distributor of candy. The company services grocery, convenience, and drug stores in a large metropolitan area. The All-Day Candy Company has achieved small but steady growth in sales over the past few years, but candy prices have also been increasing. The company is reformulating its plans for the coming fiscal year. The following data were used to project the current year's after-tax income of $110,400: $4.00 per box Average selling price Average variable costs Cost of candy Selling costs Total Annual fixed costs Selling Administrative Total $2.00 per box 0.40 per box $2.40 per box $160,000 280,000 $440,000 Expected annual sales (390,000 boxes) = $1,560,000 Tax rate = 40% Candy manufacturers have announced that they will increase prices of their products an average of 15% in the coming year because of increases in raw material (sugar, cocoa, peanuts, and so on) and labour costs. All-Day Candy Company expects that all other costs will remain the same as during the current year. Your answer is correct. What is All-Day Candy Company's breakeven point in boxes of candy for the current year? Breakeven point 275,000 boxes What average selling price per box must All-Day Candy Company charge to cover the 15% increase in the variable cost of candy and still maintain the current contribution margin ratio? (Round to 2 decimal places, e.g. 15.25.) Average selling price per box LINK TO TEXT LINK TO TEXT LINK TO TEXT x Your answer is incorrect. Try again. What volume of sales in dollars must All-Day Candy Company achieve in the coming year to maintain the same after-tax income as projected for the current year if the average selling price of candy remains at $4.00 per box and the cost of candy increases 15%? Sales
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