Question 3&4 This is just for knowledge purposes Question 3 Manatee Splash has received a demand forecast for next month for 300,000 bottles.Fixed costs are $20,000/month and variable costs are 25 cents a bottle3.1 What is the break-even quantity if eachbottle sells for 50 cents?3.2. At what price must she sell forprofit of $100,000.00?Question 4 Jacee is investigating options to purify her water. She currently purchases the waterby the tanker already purified (outsourced). She thinks buying the tanker of water, unpurified,and then completing purification in-house may be a more cost effective option.The outsourced option has an annual fixed cost of $0 and a variable cost of $9,000/tanker. In-house the fixed cost will be $100,000 and variable cost of $5,000/tanker. Revenue per tanker is$10,0004.1 At what volume, in number of tankers,would both options yield the same profit?4.2 If expected annual demand is 240tankers, which alternative (purified in-house or outsourced) will yield the higherprofit?In-houseOutsourced

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Marketing

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ISBN:9780357033791

Author:Pride, William M

Publisher:Pride, William M

Chapter19: Pricing Concepts

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Question 3 Manatee Splash has received a demand forecast for next month for 300,000 bottles. Fixed costs are $20,000/month and variable costs are 25 cents a bottle 3.1 What is the break-even quantity if each bottle sells for 50 cents? 3.2. At what price must she sell for profit of $100,000.00?