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Discuss how a change in sales volume affects profit

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Reference no: EM132642146

Samantha and Sabrina are opening a soda stand. They believe the fixed cost per week of running the stand is $50.00. Their best guess is that they can sell 300 sodas per week at $0.75 per soda. The variable cost of obtaining a can of soda is $0.20.

a. Given her other assumptions, and using Excel, find the level of sales volumes that will enable them to break even.

b. Given her other assumptions, draw a break-even graph and discuss how a change in sales volume affects profit.

c. From the graph in (b) discuss how changes in sales volumes and variable cost jointly affect profit.

Reference no: EM132642146

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