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Question 3 Manatee Splash has received a demand forecast for next month for 300,000 bottles. Fixed costs are $20,000/month and variable costs are 25 cents a bottle 3.1 What is the break-even quantity if each bottle sells for 50 cents? 3.2. At what price must she sell for profit of $100,000.00?

Question 3 Manatee Splash has received a demand forecast for next month for 300,000 bottles. Fixed costs are $20,000/month and variable costs are 25 cents a bottle 3.1 What is the break-even quantity if each bottle sells for 50 cents? 3.2. At what price must she sell for profit of $100,000.00?

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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Question 3&4 This is just for knowledge purposes
Question 3 Manatee Splash has received a demand forecast for next month for 300,000 bottles. Fixed costs are $20,000/month and variable costs are 25 cents a bottle 3.1 What is the break-even quantity if each bottle sells for 50 cents? 3.2. At what price must she sell for profit of $100,000.00? Question 4 Jacee is investigating options to purify her water. She currently purchases the water by the tanker already purified (outsourced). She thinks buying the tanker of water, unpurified, and then completing purification in-house may be a more cost effective option. The outsourced option has an annual fixed cost of $0 and a variable cost of $9,000/tanker. In- house the fixed cost will be $100,000 and variable cost of $5,000/tanker. Revenue per tanker is $10,000 4.1 At what volume, in number of tankers, would both options yield the same profit? 4.2 If expected annual demand is 240 tankers, which alternative (purified in- house or outsourced) will yield the higher profit? In-house Outsourced
Transcribed Image Text:Question 3 Manatee Splash has received a demand forecast for next month for 300,000 bottles. Fixed costs are $20,000/month and variable costs are 25 cents a bottle 3.1 What is the break-even quantity if each bottle sells for 50 cents? 3.2. At what price must she sell for profit of $100,000.00? Question 4 Jacee is investigating options to purify her water. She currently purchases the water by the tanker already purified (outsourced). She thinks buying the tanker of water, unpurified, and then completing purification in-house may be a more cost effective option. The outsourced option has an annual fixed cost of $0 and a variable cost of $9,000/tanker. In- house the fixed cost will be $100,000 and variable cost of $5,000/tanker. Revenue per tanker is $10,000 4.1 At what volume, in number of tankers, would both options yield the same profit? 4.2 If expected annual demand is 240 tankers, which alternative (purified in- house or outsourced) will yield the higher profit? In-house Outsourced
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