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Determine how many boxes must be sold to breakeven

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Reference no: EM132471849

Problem - Potato Chip Manufacturing sells potato chips to groceries. The chips are sold in boxes of 100 bags.

Selling price per box $35.00

Variable costs per box

Raw materials $16.00

Direct labor $7.00

Manufacturing indirect $4.00

Selling expenses $1.60

Total variable costs $28.60

Annual fixed costs

Manufacturing indirect $192,000

Selling and administrative $276,000

Total fixed costs $468,000

The estimated annual sales volume is 115,357 boxes.

Required -

1. Determine how many boxes must be sold to breakeven?

a. 123,000

b. 97,500

c. 73,125

d. 112,188

2. Determine how many boxes must be sold to earn $156,000.

a. 123,000

b. 97,500

c. 73,125

d. 112,188

3. Determine how many boxes must be sold to earn $250,000.

a. 123,000

b. 97,500

c. 73,125

d. 112,188

Reference no: EM132471849

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