Answer:
1.
4,130 basckets
2.
Raise selling price to $27.84
Reduce variable costs to $16.7
Reduce fixed costs to $$11,400
Explanation:
Breakeven point is th level of sales where business have no profit no loss situation.
Contribution margin = Contribution margin / selling price = ( Selling Price - Variable cost ) / selling price = $27 - $17 = $10
Target Sales = ( Target Income + Fixed cost ) / Contribution margin ratio = ( $28,700 + $12,600 ) / $10 = 4,130 basckets
Selling Price
Selling price = Target Revenue / Number of Units sold = $111,622 / 4,010 = $27.84
Variable cost
Sales volume = ( Target income + Fixed cost) / Contribution margin
4,010 units = ( $28,700 + $12,600 ) / ( $27 - variable cost )
4,010 units = 41300 / ( $27 - variable cost )
$27 - variable cost = $41,300 / 4,010 units
$27 - variable cost = $10.3 per unit
Variable cost = $27 - 10.3 = $16.7
Fixed Cost
Sales volume = ( Target income + Fixed cost) / Contribution margin
4,010 units = ( $28,700 + Fixed cost ) / $10
4,010 x $10 = ( $28,700 + Fixed cost )
%$40,100 = $28,700 + Fixed cost
Fixed cost = $40100 - $28,700 = $11,400
