Using the information provided in the exhibit, complete each item below. For items 1-5, round to the nearest hundredth in calculations and enter final answers as positive whole numbers. For item 6, complete the sentence using the option list provided.

Item / Answer

1. Breakeven point in dollars for the coffee bundle ______

2. Breakeven point in units for the coffee bundle ______

3. Target units to generate $234,000 of operating income: Coffee Makers ______

4. Target units to generate $234,000 of operating income: Coffee Creamer ______

5. Target Units to generate $234,000 of operating income: Coffee Beans ______

6. To maximize profits, the company should increase the quantity of ______ in the coffee bundle.

Memo To: Nikita Leonard, Controller From: Thomas Sheppard, Sales Manager Date: October 4, Year 7 Subject: Unit Selling Price and Costs Nikita, In accordance with our conversation, the company plans to sell a new bundled product to corporate customers. The product bundle consists of our three traditional products: coffee maker, coffee creamer, and coffee beans. Each bundle includes two coffee makers, fifteen bottles of coffee creamer, and thirteen boxes of coffee beans. Fixed costs are $150,000. My team has analyzed the cost structure for the coffee bundle. The following is the result: Our goal for the coffee bundle is to earn $234,000 of operating income. Please let me know if you need additional information. Regards, Thomas Memo To: Nikita Leonard, Controller From: Thomas Sheppard, Sales Manager Date: October 4, Year 7 Subject: Unit Selling Price and Costs Nikita, In accordance with our conversation, the company plans to sell a new bundled product to corporate customers. The product bundle consists of our three traditional products: coffee maker, coffee creamer, and coffee beans. Each bundle includes two coffee makers, fifteen bottles of coffee creamer, and thirteen boxes of coffee beans. Fixed costs are $150,000. My team has analyzed the cost structure for the coffee bundle. The following is the result: Our goal for the coffee bundle is to earn $234,000 of operating income. Please let me know if you need additional information. Regards, Thomas