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Whispering Meadows, a winery in British Columbia, manufactures a premium white cabernet and sells primarily to distributors. Wine is sold in cases of one dozen
Whispering Meadows, a winery in British Columbia, manufactures a premium white cabernet and sells primarily to distributors. Wine is sold in cases of one dozen bottles. In the year ended December 31, Whispering Meadows sold 250,000 cases at an average selling price of $110.80 per case. The following additional data are for Whispering Meadows for the year ended December 31 (assume constant unit costs and no price, rate, or efficiency variances). (Click the icon to view the data.) Requirement 1. Calculate cases of production for Whispering Meadows for the year. Number of cases to be produced for the year is Requirement 2. Find the breakeven point (number of cases) for the year: a. Under variable costing b. Under absorption costing (Round your answers up to the nearest whole number.) a. Under variable costing b. Under absorption costing Requirement 3. Grape prices are expected to increase 30% next year. Assuming all other data remain constant, what is the minimum number of cases Whispering Meadows must sell next year to break even? Calculate the breakeven point: a. Under variable costing b. Under absorption costing (Round your answers up to the nearest whole number.) a. Variable costing b. Absorption costing Requirement 4. Assume the owners of Whispering Meadows want to increase next year's operating income 10% over current levels. Using the same data as in requirement 3 , recalculate the target quantity of cases under variable and absorption costing. Use approximation method for absorption costing. (Hold all decimals in interim calculations. Round your answers up to the nearest whole number.) a. Variable costing b. Absorption costing Data On December 31 , the unit costs per case for closing inventory are $58.70 for variable costing and $75.70 for absorption costing
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