Farmers Choice’ produces animal feed. The fixed monthly cost of production is $700000 and the variable cost per bag of feed is $1200. Each bag of feed sells for $2500. (a) For a monthly volume of 700 bags, determine the total cost, total revenue and profit (b) Determine the monthly break-even volume for ‘Farmers Choice’ animal feeds. (c) If ‘Farmer’s Choice’ increases its price per bag of animal feed from 2500 to 2700 what is the new break-even volume.
Farmers Choice’ produces animal feed. The fixed monthly cost of production is $700000 and the variable cost per bag of feed is $1200. Each bag of feed sells for $2500. (a) For a monthly volume of 700 bags, determine the total cost, total revenue and profit (b) Determine the monthly break-even volume for ‘Farmers Choice’ animal feeds. (c) If ‘Farmer’s Choice’ increases its price per bag of animal feed from 2500 to 2700 what is the new break-even volume.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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- Farmers Choice’ produces animal feed. The fixed monthly cost of production is $700000 and the variable cost per bag of feed is $1200. Each bag of feed sells for $2500.
(a) For a monthly volume of 700 bags, determine the total cost, total revenue and profit (b) Determine the monthly break-even volume for ‘Farmers Choice’ animal feeds.
(c) If ‘Farmer’s Choice’ increases its price per bag of animal feed from 2500 to 2700 what is the new break-even volume.
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