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:

Median Nerve

A major nerve in the human body extending down the arm, through the carpal tunnel in the wrist, to the hand, responsible for sensation and movement.

Parasympathetic Division

A branch of the autonomic nervous system that conserves energy as it slows the heart rate, increases intestinal and gland activity, and relaxes sphincter muscles.

Autonomic Nervous System

The part of the nervous system responsible for control of the bodily functions not consciously directed, such as breathing, the heartbeat, and digestive processes.

Motor Response

The physical reaction or movement in response to a specific stimulus, mediated by the central and peripheral nervous systems.