Breakeven Analysys, Marketing Management

Assignment Help:
Breakeven Analysis

Campbell Soups has set up a factory in Hong Kong at an estimated cost of $3.1 Million. In the first few years of operation, its product line will consist of duck soup and egg noodle soup to be sold in 16 oz. cans. The factory can make 900,000 cans of soup a month (any combination of the two varieties).

Cost estimates for the product line is as follows:

Material cost/can: 5 cents (egg noodle), 20 cents (duck)
Labor cost per can: 18 cents (both types of soup)
Promotional costs: 10% of sales
Product line launch: $720,000 (covers both soups)
Administrative costs: $230,000 per year

Campbells will price the duck soup at $1.20 per can, and the egg noodle soup at $0.70 per can.
It expects to sell twice as many cans of duck soup as egg noodle soup.

(a) At break-even, how many cans of each type of soup would Campbell soups have sold?
(b) How soon can Campbell Soups break-even, assuming it can operate at full factory capacity?

(Hint: First calculate the unit contribution margin for each soup; then use the sales ratio to figure out how many units of each soup Campbell’s would sell – this will allow you to calculate TOTAL contribution from both soups. Subtract any recurring fixed costs from this number, and then figure out time to BE on the one-time fixed costs).

Related Discussions:- Breakeven Analysys

Sales promotion, Sales promotion: it includes activities other than advert...

Sales promotion: it includes activities other than advertising, personal selling publicity and public relations which are used in the promotiong of the product or in persuading th

Marketing questionnaire, Marketing Questionnaire is a very efficient busine...

Marketing Questionnaire is a very efficient business analysis tool that examines each and every aspect of your business from a marketing perspective. It is suggested that more than

What is role and status of sociality in consumer behaviour, What is the rol...

What is the role and status of sociality in the consumer behaviour? Social: This comprises family and their status and role. 1. Family: It also affect the buying behavi

Advertising and public relations, We have just completed another Election p...

We have just completed another Election process. Think of some of the political advertisement you were bombarded with during the last few months. What types of media were used in t

#title.test marketing, what is test marketing ? explain the various approac...

what is test marketing ? explain the various approaches that are followed by FMCG companies in test marketing?

Why do businesses meet with failures, Question 1: If an organisation de...

Question 1: If an organisation decides to start trading internationally, besides exporting, it has various modes of entry. Critically explain and evaluate each mode of entry wi

Marketing services, As the opening vignette indicates, The Mayo clinic has ...

As the opening vignette indicates, The Mayo clinic has been built as one of the most powerful services brands on its firmly held belief and focus on the experience of the patient.

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd