Purchase Solution

The Evergreen Fertilizer Company

Not what you're looking for?

Ask Custom Question

4. The Evergreen Fertilizer Company produces fertilizer. The company's fixed monthly cost is $25,000, and its variable cost per pound of fertilizer is $0.15. Evergreen sells the fertilizer for $0.40 per pound. Determine the monthly break-even volume for the company.

10. If the maximum operating capacity of the Evergreen Fertilizer Company described in problem 4 is 120,000 pounds of fertilizer per month, determine the break-even volume as a percentage of capacity.

20. Annie McCoy, a student at Tech, plans to open a hot dog stand inside Tech's football stadium during home games. There are seven home games scheduled for the upcoming season. She must pay the Tech athletic department a vendor's fee of $3,000 for the season. Her stand and other equipment will cost her $4,500 for the season. She estimates that each hot dog she sells will cost her $0.35. She has talked to friends at other universities who sell hot dogs at games. Based on their information and the athletic department's forecast that each game will sell out, she anticipates that she will sell approximately 2,000 hot dogs during each game.
a. What price should she charge for a hot dog in order to break even?
b. What factors might occur during the season that would alter the volume sold and thus the break-even price Annie might charge.
c. What price would you suggest that Annie charge for a hot dog to provide her with a reasonable profit while remaining competitive with other food vendors?

Attachments
Purchase this Solution
Solution Preview

4. The Evergreen Fertilizer Company produces fertilizer. The company's fixed monthly cost is $25,000, and its variable cost per pound of fertilizer is $0.15. Evergreen sells the fertilizer for $0.40 per pound. Determine the monthly break-even volume for the company.

BEP = Fixed Cost / Contribution Margin (CM)

Contribution Margin = Selling Price - Variable Cost

= $0.40 - $0.15 = $.25

BEP = 25,000 / .25 = 100,000 Units

10. If the maximum operating capacity of the Evergreen Fertilizer Company described in problem 4 is 120,000 pounds of fertilizer per month, ...

Solution provided by:
Gaurav Agarwal, MS
Education
  • BE, Bangalore University, India
  • MS, University of Wisconsin-Madison
Recent Feedback
  • "Your explanation to the answers were very helpful."
  • "What does 1 and 0 means in the repair column?"
  • "Went through all of the formulas, excellent work! This really helped me!"
  • "try others as well please"
  • "Thank you, this helped a lot. I was not sure how to plug in those numbers to a formula. This was a great help. Now I have to figure out how to explain cost of capital is used in net present value analysis, and how cost of capital is used in net present value analysis. This stuff gets confusing."
Purchase this Solution
Free BrainMass Quizzes
Change and Resistance within Organizations

This quiz intended to help students understand change and resistance in organizations

Understanding the Accounting Equation

These 10 questions help a new student of accounting to understand the basic premise of accounting and how it is applied to the business world.

Business Processes

This quiz is intended to help business students better understand business processes, including those related to manufacturing and marketing. The questions focus on terms used to describe business processes and marketing activities.

Organizational Behavior (OB)

The organizational behavior (OB) quiz will help you better understand organizational behavior through the lens of managers including workforce diversity.

Income Streams

In our ever changing world, developing secondary income streams is becoming more important. This quiz provides a brief overview of income sources.

View More Free Quizzes
Related BrainMass Solutions

  • Breakeven questions

    The Evergreen Fertilizer Company produces fertilizer. The company's fixed monthly cost is $25,000, and its variable cost per pound of fertilizer is $0.15. Evergreen sells the fertilizer for $0.40 per pound.

  • Introduction to Management Science: The Retread Tire Company and The Evergreen Fertilizer Company

    For an annual volume of 12,000 tires, determine the total cost, total revenue, and profit. b. Determine the annual break-even volume for the Retread Tire Company operation. 2. The Evergreen Fertilizer Company produces fertilizer.

  • Mathematics

    Evergreen Fertilizer Company produces fertilizer. The Company's fixed monthly cost is $25,000 and its variable cost per pound of fertilizer is $0.15. Evergreen sells the fertilizer for $0.40 per pound.

  • Quantities Methods in Business

    Evergreen sells the fertilizer for $0.40 per pound. Determine the monthly break-even volume for the company.

  • Quantitative Methods

    The Evergreen Fertilizer Company produces fertilizer. The company's fixed monthly cost is $25,000, and its variable cost per pound of fertilizer is $0.15. Evergreen sells the fertilizer for $.40 per pound.

  • Miscellaneous receivable transactions

    389601 Miscellaneous receivable transactions Evergreen Company sells lawn and garden products to wholesalers. The company's fiscal year-end is December 31.

  • Incremental profit, NPV, accounting rate of return, more

    What is the effect on income if the offer from the customer is accepted? . Evergreen Company grows potatoes. Each acre of potatoes yields approximately 150 bushels of baking quality potatoes and 450 bushels of boiling potatoes.

  • Statistical Inference

    28659 Statistical Inference An agribusiness company currently uses one brand of commercial fertilizer. However, a new fertilizer is available that the manufacturer says will produce higher than average crop yields.

  • Linear programming problem using Excel Solver

    241006 The Kalo Fertilizer Company produces two brands of lawn fertilizer Super Two and Green Grow - at plants in Fresno, California, and Dearborn, Michigan.

View More Related Solutions