Question

A leading beverage company sells its signature soft drink brand in vending machines for $0.87 per 12 oz. can. A vending machine has monthly fixed costs of space rental, energy consumption, and capital depreciation of $146. Variable cost for a can of soda is $0.48. The more pessimistic operations manager was concerned about rising costs and asked the sales manager, if fixed costs increase to $190 per month, and the variable costs increase by $.10 due to rising sugar costs, what is the new breakeven volume in units at the original price

Answer 1

655

Step-by-step explanation:

Breakeven quantity are the number of units produced and sold at which net income is zero

Breakeven quantity = fixed cost / price – variable cost per unit

$190 / ( 0.87 - 0.58) = 655.2 = 655 to the nearest whole number