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Question - Cunningham 2e Real-life case studies Copyright © 2015 Cengage Learning Australia Chapter 02 - Developing a Business Plan: Cost-Volume-Profit Analysis All Natural Chocolates is a wholesale manufacturer of 'home made' chocolates. The company distributes the chocolates to food retailers, cafés, independent convenient stores and pharmacies in Sydney's metropolitan area. All Natural has achieved small but steady growth in sales over the past few years while chocolate prices have been increasing. The company is formulating its plans for the coming fiscal year. The following data was used to projects next year's net income. Average Selling Price: $4 per box Cost of chocolate ingredients per box: $2 Selling Costs: $0.4 Total Variable Costs per unit: $2.4 Projected Fixed Costs: 360,000 Questions:
Required -
1. What is All Natural Chocolates' volume break-even point in the boxes of chocolate for the coming year?
2. What selling price per box must All Natural Chocolates charge to cover the 15% increase in the cost of chocolate ingredients and still maintain the current contribution margin per unit ratio?
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