The Organic Food Market is a merchandiser of organic food items. The company is considering the possibility of selling pomegranates that would sell for $0.30 each. Pomegranates can be acquired in unlimited quantities for $0.22 each. There are no additional variable costs associated with acquiring and selling pomegranates since labor is on a salaried basis. However, in order to acquire pomegranates at this price, Organic Food Market must pay $1,000 per year for membership in an International co-op.
Required:
a. How many pomegranates would Organic Food Market need to sell annually to justify joining the co-op (break-even)?
b. What would be the total revenue at the break-even point?
c. How many pomegranates would the company need to sell to earn a profit of $1,000?
d. If pomegranates cost were $0.26 instead of $0.22, how many pomegranates would need to be sold in order to earn the same $1,000?

Question

The Organic Food Market is a merchandiser of organic food items. The company is considering the possibility of selling pomegranates that would sell for $0.30 each. Pomegranates can be acquired in unlimited quantities for $0.22 each. There are no additional variable costs associated with acquiring and selling pomegranates since labor is on a salaried basis. However, in order to acquire pomegranates at this price, Organic Food Market must pay $1,000 per year for membership in an International co-op. 
Required:
a. How many pomegranates would Organic Food Market need to sell annually to justify joining the co-op (break-even)?
b. What would be the total revenue at the break-even point?
c. How many pomegranates would the company need to sell to earn a profit of $1,000?
d. If pomegranates cost were $0.26 instead of $0.22, how many pomegranates would need to be sold in order to earn the same $1,000?

Quizplus · Accepted Answer

The Answer of The Organic Food Market is a merchandiser of organic food items. The company is considering the possibility of selling pomegranates that would sell for $0.30 each. Pomegranates can be acquired in unlimited quantities for $0.22 each. There are no additional variable costs associated with acquiring and selling pomegranates since labor is on a salaried basis. However, in order to acquire pomegranates at this price, Organic Food Market must pay $1,000 per year for membership in an International co-op. 
Required:
a. How many pomegranates would Organic Food Market need to sell annually to justify joining the co-op (break-even)?
b. What would be the total revenue at the break-even point?
c. How many pomegranates would the company need to sell to earn a profit of $1,000?
d. If pomegranates cost were $0.26 instead of $0.22, how many pomegranates would need to be sold in order to earn the same $1,000?

The Organic Food Market Is a Merchandiser of Organic Food