Studying bussiness at school is the best way of preparing the learner not only for future careers buts also equipping them with skills used in daily life. Many students love the subject due to the mind openings in the financial world. However, some tend to get it difficult especially when dealing with the assignment. My homework writes offers help for business assignments. The question below is regularly asked.
Sta. Elena produces and sells wines. Their current capacity is 100,000 gallons a year.
Last year, they sold 100,000 gallons of wine, 12% of which were in 60-gallon barrels, 58% in 1-gallon jugs, and 30% in 0.2- gallon bottles.
The base selling price is $20 per gallon in barrels. The selling price for wine in jugs per gallon is 25% higher, while that in bottles per gallon is 40% higher.
Variable cost based on the selling price is 50% for barrels, 60% for jugs, and 70% for bottles. The annual fixed expenses amount to $500,000.
Management would like to know the breakeven quantity for each of the three products, the net profit for the year, as well as what strategy to implement to increase net profit while keeping fixed costs, and variable cost ratios constant.
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