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Break-even volume

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Now, if Zebra's average cost (expenses) were $13.13 (per case) and the Distributors (wholesale) work on a 23% margin and the retailers work on a 20% margin; what would the income per case be for Zebra beer at the following three retails?

Please check your answers to the following:

1. $4.99 per 6 pk. (-$.83 per case)

2. $5.99 per 6 pk. ($1.63 per case)

3. $6.99 per 6 pk. ($4.09 per case)

And to continue with a break-even analysis, we will use the following information:

Assume average cost (expenses) per case of $13.13 - Would these be variable costs? (yes)

Assume Zebra has fixed costs of $100,000.00 for this year.

What is the break-even volume (cases) for Zebra (MadCap) at the following retail prices? Please show the formula with your results.

$5.99 per 6 pk.

$6.99 per 6 pk.

Thanks.

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Solution Summary

The solution explains how to calculate the break-even volume in cases

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Retail Price per 6 pk 4.99 5.99 6.99
Retail Price per case 19.96 23.96 27.96 6pks per case
Retail Margin 3.99 4.79 5.59 20% of retail price
Wholesaler Price 15.97 19.17 22.37
Wholesale Margin 3.67 4.41 5.14 23% of the price to retailer
Net Realization to Zebra 12.30 14.76 17.22
Cost per ...

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