Problem
Odd Wallow Drinks is considering adding a new line of fruit juices to its merchandise products. This line of juices has the following prices and costs:
Selling price per case (24 bottles) of juice $ 50
Variable cost per case (24 bottles) of juice $ 24
Fixed costs per year associated with this product $ 8,150,000
Income tax rate 40 %
Required:
(a) Compute Odd Wallow Drinks's break-even point in units per year.
(b) How many cases must Odd Wallow Drinks sell to earn $1,800,000 per year after taxes on the juice?