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QUESTION 3 [13 MARKS] You are the manager of a newly established coffee shop in Gaborone called Gabz Coffee Mart.The shop sells specialty coffee drinks, pastries, and sandwiches. It has fixed costs ( rent, salaries, utilities) of 24,000 per month. The variable cost per coffee drink (including coffee beans, milk, and cups) is P8 and the selling price per coffee drink is P16. Requireda) Explain the importance of break-even analysis for Gabz Coffee Marts decision-making process. (3 marks)b) Calculate the number of coffee drinks Gabz Coffee Mart needs to sell to reach the break-evenpoint. (3 marks)c) How many units of coffee should the shop sell to realize a profit of P8,000.00? (3 marks)d) Calculate the new breakeven quantity if fixed costs increased to P30,000 while selling priceincreased by 25% and variable cost increased by 50% (4 marks)

QUESTION 3 [13 MARKS] You are the manager of a newly established coffee shop in Gaborone called Gabz Coffee Mart.The shop sells specialty coffee drinks, pastries, and sandwiches. It has fixed costs ( rent, salaries, utilities) of 24,000 per month. The variable cost per coffee drink (including coffee beans, milk, and cups) is P8 and the selling price per coffee drink is P16. Requireda) Explain the importance of break-even analysis for Gabz Coffee Marts decision-making process. (3 marks)b) Calculate the number of coffee drinks Gabz Coffee Mart needs to sell to reach the break-evenpoint. (3 marks)c) How many units of coffee should the shop sell to realize a profit of P8,000.00? (3 marks)d) Calculate the new breakeven quantity if fixed costs increased to P30,000 while selling priceincreased by 25% and variable cost increased by 50% (4 marks)

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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QUESTION 3 [13 MARKS] You are the manager of a newly established coffee shop in Gaborone called Gabz Coffee Mart.The shop sells specialty coffee drinks, pastries, and sandwiches. It has fixed costs ( rent, salaries, utilities) of 24,000 per month. The variable cost per coffee drink (including coffee beans, milk, and cups) is P8 and the selling price per coffee drink is P16. Requireda) Explain the importance of break-even analysis for Gabz Coffee Marts decision-making process. (3 marks)b) Calculate the number of coffee drinks Gabz Coffee Mart needs to sell to reach the break-evenpoint. (3 marks)c) How many units of coffee should the shop sell to realize a profit of P8,000.00? (3 marks)d) Calculate the new breakeven quantity if fixed costs increased to P30,000 while selling priceincreased by 25% and variable cost increased by 50% (4 marks)
Transcribed Image Text:QUESTION 3 [13 MARKS] You are the manager of a newly established coffee shop in Gaborone called Gabz Coffee Mart.The shop sells specialty coffee drinks, pastries, and sandwiches. It has fixed costs ( rent, salaries, utilities) of 24,000 per month. The variable cost per coffee drink (including coffee beans, milk, and cups) is P8 and the selling price per coffee drink is P16. Requireda) Explain the importance of break-even analysis for Gabz Coffee Marts decision-making process. (3 marks)b) Calculate the number of coffee drinks Gabz Coffee Mart needs to sell to reach the break-evenpoint. (3 marks)c) How many units of coffee should the shop sell to realize a profit of P8,000.00? (3 marks)d) Calculate the new breakeven quantity if fixed costs increased to P30,000 while selling priceincreased by 25% and variable cost increased by 50% (4 marks)
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