Tempe Microbrewery

In 2009, David Tucker quit his job at a large beer company to start his own brewery, Tempe Microbrewery (TM). His family supported his decision and invested in the business along with David. TM began operations on January 10, 2010 and now produces four labels of specialty beers (Saguaro pale Ale, Bisbee Bock, Ocotillo Amber Pilsner, and Sedona Stout).

Exhibit 1
2013 Cost and Sales Information
Panel A: Per Case Information
	Saguaro Pale Ale	Bisbee Bock	Ocotillo Amber Pilsner	Sedona Stout	Total
Sales price	$21.00	$24.50	$23.50	$26.50
Direct materials	2.75	2.90	3.15	4.00
Direct labor	3.75	3.75	3.00	5.25
Variable overhead	5.90	6.18	6.10	6.34
Total variable cost	12.40	12.83	12.25	15.59
Contribution margin	$8.60	$11.67	$11.25	$10.91
Cases sold last year	12,593	7,126	6,827	4,184	30,730
Direct labor hours per case	0.25	0.25	0.20	0.35
Total direct labor hours last year	3,148.25	1,781.50	1,365.40	1,464.40	7,759.55
Machine hours per case	0.20	0.40	0.30	0.25
Total machine hours last year	2,518.60	2,850.40	2,048.10	1,046.00	8,463.10
Panel B: Contribution Margin Income Statement
Sales	264,453.00	$174,587.00	$160,434.50	$110,876.00	$710,350.50
Variable costs	156,153.20	91,426.58	83,630.75	65,228.56	396,439.09
Contribution margin	108,299.80	83,160.42	76,803.75	45,647.44	313,911.41
Direct fixed costs	10,329.62	8,392.91	6,017.39	9,893.92	34,633.84
Segment margin	$97,970.18	$74,767.51	$70,786.36	$35,753.52	279,277.57
Common fixed costs					245,389.44
Operating income					33,888.13
Taxes (35%)					11,860.85
Net income					$22,027.28

You have been hired as a consultant to help David with the business. Please address the following questions in preparation for your discussions with him.

1. Ignore any current plans. Using last years actual data and sales mix, how many total cases would David need to sell in order to earn $80,000 before tax? How many cases of each of the four labels would TM need to produce?