Question

Odd Wallow Drinks is considering adding a new line of fruit juices to its merchandise products....

Odd Wallow Drinks is considering adding a new line of fruit juices to its merchandise products. This line of juices has the following prices and costs:

Selling price per case (24 bottles) of juice $ 89
Variable cost per case (24 bottles) of juice $ 49
Fixed costs per year associated with this product $ 13,080,000
Income tax rate 40 %

Required:

a. Compute Odd Wallow Drinks's break-even point in units per year.

b. How many cases must Odd Wallow Drinks sell to earn $1,962,000 per year after taxes on the juice?

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