Your answer is incorrect. Blossom Beverages sells bottles of premium champagne. It currently costs $38 per bottle to produce each bottle of champagne. Blossom has overhead costs of $1000 per month, and expects to incur this amount each month. Blossom produced and sold 100 bottles of champagne last month and expects to continue this production and sales pattern for the rest of this current year. Its closest competitor currently sells its bottles of champagne at $55.00 per bottle. What is the lowest price that Blossom could sell each bottle of champagne for to make a monthly operating profit? O $45.01 $48.01 O $58.00 O $55.00

Your answer is incorrect. Blossom Beverages sells bottles of premium champagne. It currently costs $38 per bottle to produce each bottle of champagne. Blossom has overhead costs of $1000 per month, and expects to incur this amount each month. Blossom produced and sold 100 bottles of champagne last month and expects to continue this production and sales pattern for the rest of this current year. Its closest competitor currently sells its bottles of champagne at $55.00 per bottle. What is the lowest price that Blossom could sell each bottle of champagne for to make a monthly operating profit? O $45.01 $48.01 O $58.00 O $55.00

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Company A sells premium water bottles. The fixed costs is 29,709. The variable cost associated with producing one water bottle is $13 per unit. The water bottle is sold at price of $39. If the company set a goal of making $11,083 profit next month, how many bottles does the company need to sell?
* Your answer is incorrect. Sheridan Beverages sells bottles of premium champagne. It currently costs $41 per bottle to produce each bottle of champagne. Sheridan has overhead costs of $2700 per month, and expects to incur this amount each month. Sheridan produced and sold 100 bottles of champagne last month and expects to continue this production and sales pattern for the rest of this current year. Its closest competitor currently sells its bottles of champagne at $75.00 per bottle. What is the lowest price that Sheridan could sell each bottle of champagne for to make a monthly operating profit? $75.00 O $68.01 $65.01 O $78.00
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Crane, Inc., sells two types of water pitchers, plastic and glass. Plastic pitchers cost the company $30 and are sold for $40. Glass pitchers cost $26 and are sold for $47. All other costs are fixed at $280,800 per year. Current sales plans call for 14,000 plastic pitchers and 28,000 glass pitchers to be sold in the coming year. Crane, Inc., has just received a sales catalog from a new supplier that is offering plastic pitchers for $28. What would be the new contribution margin per unit if managers switched to the new supplier? What would be the new breakeven point if managers switched to the new supplier? (Use contribution margin per unit to calculate breakeven units. Round answers to 0 decimal places, e.g. 25,000.)
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Sunland, Inc., sells two types of water pitchers, plastic and glass. Plastic pitchers cost the company $25 and are sold for $35. Glass pitchers cost $24 and are sold for $45. All other costs are fixed at $572,000 per year. Current sales plans call for 14,000 plastic pitchers and 28,000 glass pitchers to be sold in the coming year.
Casey’s Cases sells cell phone cases in a mall kiosk. Casey charges $42 per case. The variable cost for a case, including the case, the royalty paid to the mall, and so on is $32. The monthly fixed cost for Casey’s Cases is $3,250. Required: How many cases must Casey sell every month to break even? Casey believes that he can sell 385 cases a month. What is the margin of safety in terms of the number of cases?
Preston products produces a disinfecting liquid. The liquid is sold in one gallon containers and has the following price and cost characteristics. Sales Price: $36.00 per gallon Variable costs: $12.00 per gallon Fixed costs: 504,000 per month Preston products is subject to an income tax rate of 21 percent. a. How many gallons must Preston products sell every month to break even? b. How many gallons must Preston products sell to earn a monthly operating profit of $75,840 after taxes?
Carondelet Coffee has begun making and selling pastries. The fixed costs of making the pastry are $4,000, and the company estimates that the variable costs are $.75 per pastry. How many pastries does Carondelet have to sell to earn net income of $5,000 if it sells each pastry for $3 apiece?
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An auto parts supplier sells Hardy-brand batteries to car dealers and auto mechanics. The annual demand is approximately 1,200 batteries. The supplier pays $28 for each battery and estimates that the annual holding cost is 30 percent of the battery’s value. It costs approximately $20 to place an order (managerial and clerical costs). The supplier currently orders 100 batteries per month. What is the economic order quantity? Based on your answer above, how many orders will be placed per year using the EOQ? Determine the ordering, handling, and total inventory costs for the EOQ. Determine the effective annualized cost of financing for the following credit terms, assuming that (1) discounts are not taken, (2) accounts are paid at the end of the credit period, and (3) use 365=day year: a. 1/10, n/30; b. 3/10, n/30; c. 3/10, n/60; d. 2/10, n/90
Casey’s Cases sells cell phone cases in a mall kiosk. Casey charges $40 per case. The variable cost for a case, including the case, the royalty paid to the mall, and so on is $31. The monthly fixed cost for Casey’s Cases is $3,150. Required: a. How many cases must Casey sell every month to break even? b. Casey believes that he can sell 435 cases a month. What is the margin of safety in terms of the number of cases?