Odd Wallow Drinks is considering adding a new line of fruit juices to its merchandise...
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Accounting
Odd Wallow Drinks is considering adding a new line of fruit juices to its merchandise products. This line of juices has the following prices and costs.
Selling price per case (24 bottles) of juice
$
75
Variable cost per case (24 bottles) of juice
$
36
Fixed costs per year associated with this product
$
12,168,000
Income tax rate
40
%
Required:
a. Compute Odd Wallow Drinks' break-even point in units per year.
b. How many cases must Odd Wallow Drinks sell to earn $1,872,000 per year after taxes on the juice?
Answer & Explanation
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