23. $15.0000 24. $167,500 25. $4,444 or $4,445 Use the following information to
ID: 2496131 • Letter: 2
Question
23. $15.0000
24. $167,500
25. $4,444 or $4,445
Use the following information to answer questions 23 through 25 Natural Beverages reported the following information for October and November. October 5.000 $187,500 175,000 November 4.000 Cases Sold Revenue Cost Operating Income $150,000 160,000 Natural Beverages believes that its cost function is stable and will not change in the future 23. Compute Natural Beverages' variable cost per case. 24. What total cost should Natural Beverages expect if it sells 4,500 cases in December? 25. Compute the number of cases that Natural Beverages must sell to breakeven.Explanation / Answer
23
Calculation of Natural Beverages Variable cost per case:
Cases Sold
Cost
October
5000
$ 175,000
November
4000
$ 160,000
Difference
1000
$ 15,000
Variable cost per Case = $15000 /1000
$ 15
24
Calculation of total cost for 4500 Cases:
Fixed cost = 175000 - (5000*15)
$ 100,000
Add: variable cost = 4500 * $15
$ 67,500
Total cost for 4500 Cases
$ 167,500
25
Calculation of Breakeven number of cases:
Sales Price = (187500 / 5000)
$ 37.50
Less: Variable cost per case
$ (15)
Contribution Per case
$ 22.50
Fixed cost = 175000 - (5000*15)
$ 100,000
Breakeven number of cases = 100000 /22.5
4444 or 4445
23
Calculation of Natural Beverages Variable cost per case:
Cases Sold
Cost
October
5000
$ 175,000
November
4000
$ 160,000
Difference
1000
$ 15,000
Variable cost per Case = $15000 /1000
$ 15
24
Calculation of total cost for 4500 Cases:
Fixed cost = 175000 - (5000*15)
$ 100,000
Add: variable cost = 4500 * $15
$ 67,500
Total cost for 4500 Cases
$ 167,500
25
Calculation of Breakeven number of cases:
Sales Price = (187500 / 5000)
$ 37.50
Less: Variable cost per case
$ (15)
Contribution Per case
$ 22.50
Fixed cost = 175000 - (5000*15)
$ 100,000
Breakeven number of cases = 100000 /22.5
4444 or 4445
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