estion 2: Zeroll Ice Cream company produces and sells premium ice cream cones in Coles supermarkets. The following table shows selling price and cost information of ice cream cones: Price per cone: $ 5.00 Variable cost per cone:Ingredients $1.35Direct labour $0.45Overhead $0.20Fixed cost per month $3,000Required: a. Calculate the breakeven point in units and in dollars. Click or tap here to enter text.b. The company’s general director has determined a target profit of $6,000 for next year. Given the price and cost information above, what are the required sales in units and in dollars for the company to achieve this target? Click or tap here to enter text.c. Calculate Zeroll’s new break-even point (in units and in dollars) for each of the following independent scenarios: Selling price decreases by $0.50 per cone. Click or tap here to enter text.
Question 2:
Zeroll Ice Cream company produces and sells premium ice cream cones in Coles supermarkets. The following table shows selling price and cost information of ice cream
cones:
Price per cone: $ 5.00
Variable cost per cone:
Ingredients $1.35
Direct labour $0.45
Overhead $0.20
Fixed cost per month $3,000
Required:
a. Calculate the breakeven point in units and in dollars.
Click or tap here to enter text.
b. The company’s general director has determined a target profit of $6,000 for next year. Given the price and cost information above, what are the required sales in units and in dollars for the company to achieve this target?
Click or tap here to enter text.
c. Calculate Zeroll’s new break-even point (in units and in dollars) for each of the
following independent scenarios:
Selling price decreases by $0.50 per cone.
Click or tap here to enter text.
Fixed costs decrease by $300 per month.
Click or tap here to enter text.
Variable costs increase by $0.50 per cone
Click or tap here to enter text.
d. Assuming that the company meets its target profit of $6,000 for next year, what will be its margin of safety ratio?
e. When consulting with the managing director about the implication of operating leverage measure, he states that the higher the operating leverage, the better the company’s future performance. Do you agree or disagree with his statement? Explain.
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