Problem:
Breakeven point, what-if analysis Air Peanut Company manufactures and sells roasted peanut packets to commercial airlines. Following are the price and cost data per 100 packets of peanuts:
Required
(a) Determine Air Peanut's breakeven point in units.
(b) How many packets does Air Peanut have to sell to earn $156,000?
(c) Air Peanut expects its direct labor costs to increase by 5% next year. How many units will it have to sell next year to break even if the selling price remains unchanged?
(d) If Air Peanut's direct labor costs increase by 5%, what selling price per 100 packets must it charge to maintain the same contribution margin-to-sales ratio?