Miss Shield\'s Fruit Baskets Co. creates wonderful gift baskets of fruit and oth
ID: 2459156 • 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-ounce 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 tor 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 are $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 basket must sold for Mjss Shield's Fruit Baskets Co. to break even this year?Explanation / Answer
Let us assume the number of small baskets sold as X The sale value of the fruit baskets will be $ 39.99 X The cost of the fruit basket comprises of : Material Costs Cost per Total Cost $ Oranges 2 $0.60 1.2 Applies 2 $0.50 1 Pears 2 $1.00 2 Ounces of Cheese 6 $0.55 3.3 Crackers 1 $1.70 1.7 9.2 X Labour Cost (No.of baskets X rate per basket) 21 X Packing Costs ($ 11.92 per 100 baskets) 0.1192 X Fixed Costs 22,200 $ For calculating the breakeven point, sales should be equal to costs Hence, 39.99 X = 9.2 X + 21 X + 0.1192 X + 22,200 Therefore, 9.77808 X = 22,200 Hence, X = 2,270 baskets