Marketing 5th Edition by Dhruv Grewal,Michael Levy

Exercise 19

A soft drink manufacturer opened a new manufacturing plant in the Midwest. The total fixed costs are $100 million. It plans to sell soft drinks for $6.00 for a package of 10 12-ounce cans to retailers. Its variable costs for the ingredients are $4.00 per package. Calculate the break-even volume. What would happen to the break-even point if the fixed costs decreased to $50 million, or the variable costs decreased to $3 due to declines in commodity costs. What would the break-even be if the firm wanted to make $20 million