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    Odd Wallow Drinks - Breakeven Point

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    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 $ 60
    Variable cost per case (24 bottles) of juice $ 27
    Fixed costs per year associated with this product $ 8,110,000
    Income tax rate 40 %


    (a) Compute Odd Wallow Drinks's break-even point in units per year. (Round your answer to the nearest whole number.)

    Break-even point cases

    (b) How many cases must Odd Wallow Drinks sell to earn $1,830,000 per year after taxes on the juice? (Round your answer to the nearest whole number.)

    Number of cases

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    Solution Summary

    The solution computes breakeven & No. of cases to be sold acheive required profit.