# **** I need help with question 4/5/6****   Nicholas Coffee roasts coffee the old-fashioned way (in gas-fired, rotating barrel roasters).  It is selling its gourmet coffee beans at $20 per pound. Variable costs per pound are$8, and it has fixed cost of $840,000 per year. 1 Find its breakeven quantity in pounds/year, using the above data. 2 Nicholas is contemplating installation of digitally-controlled air-blown roasters. This will increase fixed cost to$1,200,000 per year, but it will lower variable cost to $5 per pound. If it installs the new roasters, what will be its breakeven quantity in pounds/year if it maintains its selling price at$20 per pound?       3 Express the breakeven quantity in (2) in dollar sales.       4 Nicholas does not believe it can sell more than 70000 pounds/year.  What will it need to increase its price to if it is to breakeven at 70000 pounds per year, after installing the new air-blown roasting facilities?         5 What is the Contribution Margin Ratio (CMR), using $5 per pound variable cost and a price of$22.14?         6 What is the DOL if Nicholas is lucky and sells 80000 pounds per year at $22.14 per pound (after installing the new air-blown roasting facilities)? Question **** I need help with question 4/5/6**** Nicholas Coffee roasts coffee the old-fashioned way (in gas-fired, rotating barrel roasters). It is selling its gourmet coffee beans at$20 per pound.  Variable costs per pound are $8, and it has fixed cost of$840,000 per year.

1 Find its breakeven quantity in pounds/year,  using the above data.

2 Nicholas is contemplating installation of digitally-controlled air-blown roasters.  This will increase fixed cost to $1,200,000 per year, but it will lower variable cost to$5 per pound.  If it installs the new roasters, what will be its breakeven quantity in pounds/year if it maintains its selling price at $20 per pound? 3 Express the breakeven quantity in (2) in dollar sales. 4 Nicholas does not believe it can sell more than 70000 pounds/year. What will it need to increase its price to if it is to breakeven at 70000 pounds per year, after installing the new air-blown roasting facilities? 5 What is the Contribution Margin Ratio (CMR), using$5 per pound variable cost and a price of $22.14? 6 What is the DOL if Nicholas is lucky and sells 80000 pounds per year at$22.14 per pound (after installing the new air-blown roasting facilities)?