Evergreen Fertilizer Company produces fertilizer. The company's fixed monthly cost is $25,000.00, and its variable cost per pound of fertilizer is $0.15. Evergreen sells the fertilizer for $0.40 per pound. a) Determine the break-even volume for the company. What is the Contribution Margin? b) If Evergreen Fertilizer Companychanges the price of its fertilizer from $0.40 per pound to $0.60 per pound. What effect will the change have on the break-even volume. What is the Contribution Margin? c) Using the price of $0.60 per pounds, if Evergreen Fertilizer Companyc hanges its production process to add a weed killer to the fertilizer in order to increase sales, the variable cost per pound will increase from $0.15 to $0.22. What effect will this change have on the break-even volume.

Evergreen Fertilizer Company produces fertilizer. The company's fixed monthly cost is $25,000.00, and its variable cost per pound of fertilizer is $0.15. Evergreen sells the fertilizer for $0.40 per pound. a) Determine the break-even volume for the company. What is the Contribution Margin? b) If Evergreen Fertilizer Companychanges the price of its fertilizer from $0.40 per pound to $0.60 per pound. What effect will the change have on the break-even volume. What is the Contribution Margin? c) Using the price of $0.60 per pounds, if Evergreen Fertilizer Companyc hanges its production process to add a weed killer to the fertilizer in order to increase sales, the variable cost per pound will increase from $0.15 to $0.22. What effect will this change have on the break-even volume.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter16: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 11E

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Concept explainers

Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.

Question

Could you please help me solve this on excel using the excel formulas?

Fomula:
0onat is the Conthbution Margin?
d)
New Fixed cost =
New Variable cost =
New Price =
V =
Ibs.
Fomula:
Prob 2
Instructions
Prob 1
Prob 2
e: 1 of 1
MacBook Pro

Evergreen Fertilizer Company produces fertilizer. The company's fixed monthly cost is $25,000.00, and its variable cost
per pound of fertilizer is $0.15. Evergreen sells the fertilizer for $0.40 per pound.
4
a) Determine the break-even volume for the company. What is the Contribution Margin?
6
b) If Evergreen Fertilizer Companychanges the price of its fertilizer from $0.40 per pound to $0.60 per pound. What effect
will the change have on the break-even volume. What is the Contribution Margin?
7
8
c) Using the price of $0.60 per pounds, if Evergreen Fertilizer Companyc hanges its production process to add a weed
killer to the fertilizer in order to increase sales, the variable cost per pound will increase from $0.15 to $0.22. What effect
will this change have on the break-even volume.
10
11
12
13
d) If Evergreen Fertilizer Company increases its advertising expenditures by $14,000 per year and using variable cost of
$0.22 and price of $0.60, what effect will the increase have on the break-even volume.
14
15
16
17
18
19
20
a)
Fixed Cost
21
22
Variable cost
23
Formula box type in the formula in words that you used
24
Price =
to calculate the answer.
25
26
V =
Ibs. per month
Formula:
27
28
What is the Contribution Margin?
Fomula:
29
30
b)
New Price =
31
- 32
33
V =
Ibs. per month
Fomula:
34
35
What is the Contribution Margin?
36
Fomula:
37
38
39
c)
New Variable cost =
40
V =
41
Ibs.
Fomula:
42
What is the Contribution Margin?
43
Fomula:
Instructions
Prob 1
Prob 2
Page: 1 of 1

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Evergreen Fertilizer Company produces fertilizer. The company's fixed monthly cost is $25,000, and its variable cost per pound of fertilizer is $0.15. Evergreen sells the fertilizer for $0.40 per pound. Graphically illustrate the break-even volume
7. Evergreen Fertilizer Company produces fertilizer. The company's fixed monthly cost is $25,000 and its variable cost per pound of fertilizer is $0.15. Evergreen sells the fertilizer for $0.40 per pound. Determine the monthly break-even volume for the company. If the maximum operating capacity of Evergreen Fertilizer Company described in Problem 2 is120,000 pounds of fertilizer per month, determine the break-even volume as a percentage of capacity. • If Evergreen Fertilizer Company in Problem 2 changes the price of its fertilizer from $0.40 per pound to $0.60 per pound, what effect will the change have on the break-even volume? • If Evergreen Fertilizer Company changes its production process to add a weed killer to the fertilizer in order to increase sales, the variable cost per pound will increase from $0.15 to $0.22.What effect will this change have on the break- even volume computed in Problem 4? If Evergreen Fertilizer Company increases its advertising expenditures by $14,000 per…
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