2. Fruity Plc plans to produce a new drink based on fruit and yoghurt called Stream. It is anticipated that variable costs will amount to 35p (0.35) per drink. The company will produce Stream in a processing facility with a capacity to produce 400,000 drinks a year. Fixed costs are anticipated as being 165,000 per year. The company plans to supply to retailers at a price of 95p (0.95) per drink. Required: a) Calculate the break-even volume and the break-even revenue at the projected price. b) Calculate the break-even sales price to retailers if the factory is used at full capacity. c) The company is thinking of setting the price at 1.00 per drink and launching an advertising campaign at a cost of 35,000 how many drinks will need to be sold to achieve a profit of 27,500. d) Describe the following pricing strategies and explain the market conditions when they are more likely to be successful. In addition, explain how they would impact on the price of the drinks: a. Market skimming b. Market penetration c. Target pricing A major health food chain has approached Fruity plc to ask if the company would be willing to provide 100,000 drinks in the forthcoming year at a price of 60p per drink. The company will only accept 100,000 drinks. Assume that the company has finalised production and sales plans for the year at a price of 0.95 and a volume of 360,000 drinks. Required: e) Assess whether Fruity Plc should accept this special order and calculate the companys profit if the order is accepted. f) Discuss other factors companies should consider when deciding whether to make or buy-in.