Popcorn Inc

question 150

Essay

Popcorn Inc.currently sells plain popcorn at the ballpark.During a typical month the stand reports a profit of $18,000 with sales of $100,000 and fixed costs of $42,000 and variable costs of $0.64 per box.Next year the company plans to start selling candy-coated popcorn for $3 a box.The candy-coated popcorn will have a variable cost of $0.72.The new equipment and personnel to handle the popcorn will increase monthly fixed costs by $17,616.Two boxes of candy-coated popcorn are expected to sell for every box of plain popcorn.Required:
a.Determine the monthly break-even sales in units before adding the candy-coated popcorn product.
b.Determine the monthly break-even sales in units of each product during the first year of candy-coated popcorn sales assuming a constant sales mix.

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Definitions:

Quality Circle

A group of workers who voluntarily meet to discuss and suggest improvements in work processes, typically within a manufacturing context.

Creative Potential

The capacity or ability to generate innovative ideas and solutions.

Internal Customers

Individuals or departments within an organization that receive services or products from other parts of the company as part of the internal process.

Deming's Path

outlines a quality management philosophy focused on continuous improvement, customer focus, and the use of statistical methods for process control.