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Finding the break-even point You are working for a business named Cool Water which is currently selling bottled water in cases, containing four six-packs, to supermarkets and convenience stores for $9

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Finding the break-even point

You are working for a business named Cool Water which is currently selling bottled water in

cases, containing four six-packs, to supermarkets and convenience stores for $9.00 per

case. Last year the business sold 292 000 cases. The variable cost per case is $5.60 and

fixed costs are $680 000 per year. The manager has indicated that they considering another

possible price change to help increase the business' profits. The alternative the business is

considering is to increase the selling price per case to $9.45. They believe this would result

in a loss of sales of 92 000 cases.

The manager has asked you to calculate the items listed below

1. Current amounts for:

a. Contribution margin (per case and in total)

b. Break-even (in cases and dollars)

c. Profit (net income)

2. Amounts for an alternative:

a. Contribution margin (per case and in total)

b. Break-even (in cases and dollars)

c. Profit (net income)

3. Provide your recommendation with an explanation