Spanish bread must be sold in order to break even

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Reference no: EM132300112

The owner Mang Juan’s Bakery is contemplating adding Spanish bread to his line, which will require leasing new equipment for a monthly payment of PhP 10,000. Variable costs would be PhP 2.00 per Spanish bread, and it would retail for PhP 7.00 each.

a. How many Spanish bread must be sold in order to break even?

b. What would the profit (loss) be if 1,500 Spanish bread are made and sold in a month?

c. How many Spanish bread must be sold to realize a profit of PhP3,000?

d. If 2,000 can be sold, and a profit target is PhP5,000, what price should be charged per piece?

e. Your production capacity is only 2,500 units, based in your item C answer, what will be your decision/recommendation? What trade-offs are you willing to make?

f. Based in your item B answer, what else can you do to improve your profitability (from an operations perspective, marketing perspective, finance perspective)

Reference no: EM132300112

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