Miss Shield\'s Fruit Baskets Co. creates wonderful gift baskets of fruit and oth
ID: 1721238 • Letter: M
Question
Miss Shield's Fruit Baskets Co. creates wonderful gift baskets of fruit and other food items. The company prices its large baskets at $59.99 and its small baskets at $39;99. For the baskets themselves, 50 large baskets cost $174.50, and 50 small baskets cost $114.50. The large basket is filled with 3 oranges, 3 apples, 3 pears, 3 bananas, 4 ounces of grapes, 12 ounces of cheese, a package of crackers, and a 4-ouncc coffee grounds packet. The small basket is filled with 2 oranges. 2 apples. 2 pears, 6 ounces of cheese, and a package of crackers. Oranges cost $0.60 each; apples. $0.50 each; pears, $1.00 each; and bananas, $0.40 each. Grapes cost $0.25 per ounce, and cheese, $0.55 per ounce. Crackers cost $1.70 per package. Coffee costs $0.75 per ounce. Cellophane bags to wrap the large basket cost $38.90 for 100 and bags to wrap the small basket cost $11.92 for 100. The assembly worker builds three baskets each hour and is paid at a rate of $7 per basket assembled. The annual fixed costs for Miss Shield's Fruit Baskets Co. arc $22,200. The variable cost for each basket is made up of the cost of supplies for that basket plus the direct labor. If no large baskets are sold, how many small fruit baskets must be sold for Miss Shield's Fruit Baskets Co. to break even this year?Explanation / Answer
Large Basket Cost = 26.0123
Small Nasket Cost = 13.9425
Let x be the number of large basket and y be the number of small basket.
Total Cost = 22200 + 26.0123 x + 13.9425 y
Total Revnue = 59.99 x + 39.99 y
We need to find break even point (Revenue = Cost ) when number of large baskets x=0
59.99 x + 39.99 y = 22200 + 26.0123 x + 13.9425 y
Put x=0
39.99 y = 22200 + 13.9425 y
26.0475 y = 22200
y = 844.61
y = 845
So number of small baskets for break even point = 845
Items Cost/ Item Item/Large Basket Item/small Basket Large Basket Cost Small Basket Cost Basket 3.49 2.29 orange 0.6 3 2 1.8 1.2 apple 0.5 3 2 1.5 1 pears 1 3 2 3 2 banana 0.4 3 0 1.2 0 Grapes 0.25 4 0 1 0 cheese 0.55 12 6 6.6 3.3 Crackers 1.7 1 1 1.7 1.7 coffee 0.75 4 0 3 0 Wrapping cost 0.389 0.1192 Labour Cost 2.3333 2.3333 26.0123 13.9425