Question

Suppose you have decided to start a small business selling snacks from vending machines. You have secured a location for one candy vending machine in a local bookstore. Rental for the space will cost $200 per month.

Vending machines can be purchased at wholesale clubs such as Sam’s Club and Costco. You can also purchase the snacks to stock the machines in bulk there.

REQUIRED:

Assume your machine can accommodate more than one product, for example, a snack machine that can dispense both chips and candy bars or a drink machine that offers both soda and water. The products should have different prices, variable costs, and contribution margins. Perform the analyses for three levels of sales mix: 50/50, 30/70, and 70/30.

Beverage choice: Coke Zero & Water

Cost of vending machine: $4500

Coke Zero  

Coke Zero in bulk: $22.99 for 35 cans

Cost per can: 22.99/35 = $0.66

Will charge $1.50 for each can

Contribution Margin: 1.5-0.66 = $0.84

To cover the cost of the vending machine: 4500 /.84 = 5357

Monthly break-even point in bars: 200/.84 = 238 (rounded to nearest whole number)

Monthly break-even point in sales: 238*1.5 = $357

Water

Water in bulk: $4.98 for 32 bottles  

Cost per bottle: 4.98/32 = $0.16

Will charge $1.50 for each bottle  

Contribution Margin: 1.5-0.16 = 1.34

To cover the cost of the vending machine: 4500/1.34 = 3358 (rounded to nearest whole number

Monthly break-even point in bars: 200/1.34 = 149 (rounded to nearest whole number)

Monthly break-even point in sales: 149*1.5 = $223.5

NEED HELP WITH THE FOLLOWING:

Perform the analyses for three levels of sales mix: 50/50, 30/70, and 70/30.

Answer 1

we have performed the analyses to the breakeven point of fixed machinery cost and monthly rent assuming that to be the maximum capacity

we have assumed this for 1 month time period, hence one month''s cost is added

we can see 70:30 capacity works best as sales mix

Microsoft Excel (Product Activation Failed) - Book1.xlsx L A C D E G H M N C P R coke 1 water breakeven capacity (machine & rent) 5595 3507 3 cost per unit 0.66 0.16 sales price per unit 4 1.5 1.5 contribution/ profit per unit 5 0.84 1.34 6 7 50:50 capacity 2797.5 1753.5 2126.91 total 4196 25 2630 25 enue 10 total profit 4699.59 2349.9 2349.69 11 less rent machine cost 4700 12 net profit -0.41 13 14 1052.1 70:30 capacity 3916.5 15 total cost 2584.89 168.336 2753.226 16 total revenue 1578.15 7452.9 5874.75 17 profit 3289.86 1409.814 4699.674 18 less rent & machine cost 4700 net profit -0.326 19 20 21 30:70 capacity 1678.5 2454,9 total cost 392.784 1500.594 22 1107.81 total revenue 6200.1 23 2517.75 3682.35 1409.94 3289.566 4699 profit ent & machine cost mo 26. net profit O 494 27 28 29 30 31 32 33 N SheetsSheet9Sheet10 Sheet11 Sheets Sheet6 Sheet12 Sheet13 Sheet14 Sheet7 ENG 5:13 PM INTL 6/19/2019