Below are Dairy Valley Hot Dog Sauce. Dairy Valley expects sales next month in July to double to $1,920. Because they were projecting double sales, they ordered double quantities of ingredients. This qualified them for a large discount from their wholesaler. This meant that COGS will increase only to $425. Fixed costs will, of course, remain the same at $270. At what point (in dollar sales) will they break even for the month of July? Dairy Valley Hot Dog Sauce Income Statement For Month Ended June 30, 2010 Total Sales 960 Cost of Goods Sold 285 (Variable Costs) Gross Margin 675 Operating Expenses Rent – production space 80 Rent – wet room 112 Rent – storage (4 x 4 x 6 space) 25 Rent – freezer space 13 Cell phone 40 Total Expenses (Fixed Costs) 270 Net Profit Pretax $405 Calculate the breakeven point
Below are Dairy Valley Hot Dog Sauce. Dairy Valley expects sales next month in July to double to $1,920. Because they were projecting double sales, they ordered double quantities of ingredients. This qualified them for a large discount from their wholesaler. This meant that COGS will increase only to $425. Fixed costs will, of course, remain the same at $270. At what point (in dollar sales) will they break even for the month of July? Dairy Valley Hot Dog Sauce Income Statement For Month Ended June 30, 2010 Total Sales 960 Cost of Goods Sold 285 (Variable Costs) Gross Margin 675 Operating Expenses Rent – production space 80 Rent – wet room 112 Rent – storage (4 x 4 x 6 space) 25 Rent – freezer space 13 Cell phone 40 Total Expenses (Fixed Costs) 270 Net Profit Pretax $405 Calculate the breakeven point
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Below are Dairy Valley Hot Dog Sauce. Dairy Valley expects sales next month in July to double to
$1,920. Because they were projecting double sales, they ordered double quantities of ingredients.
This qualified them for a large discount from their wholesaler. This meant that COGS will increase
only to $425. Fixed costs will, of course, remain the same at $270. At what point (in dollar sales)
will they break even for the month of July?
$1,920. Because they were projecting double sales, they ordered double quantities of ingredients.
This qualified them for a large discount from their wholesaler. This meant that COGS will increase
only to $425. Fixed costs will, of course, remain the same at $270. At what point (in dollar sales)
will they break even for the month of July?
Dairy Valley Hot Dog Sauce
Income Statement
For Month Ended June 30, 2010
Total Sales 960
Cost of Goods Sold 285
(Variable Costs)
Gross Margin 675
Operating Expenses
Rent – production space 80
Income Statement
For Month Ended June 30, 2010
Total Sales 960
Cost of Goods Sold 285
(Variable Costs)
Gross Margin 675
Operating Expenses
Rent – production space 80
Rent – wet room 112
Rent – storage (4 x 4 x 6 space) 25
Rent – freezer space 13
Cell phone 40
Total Expenses (Fixed Costs) 270
Net Profit Pretax $405
Rent – storage (4 x 4 x 6 space) 25
Rent – freezer space 13
Cell phone 40
Total Expenses (Fixed Costs) 270
Net Profit Pretax $405
Calculate the breakeven point
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