Managerial Accounting

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You received an email from Carl the operations
manager from the California Container division. They produce packaging for cell
phones. Carl understands that his product is an important cash producer for the
company.

The delivery price is based on long term contracts.

The price of the supply of cardboard has increased
due to a .15 fuel surcharge added to the cost.

Carl has a fixed monthly cost of $257,000 and
delivers 3.3 million packages in the same time period for a price of $3.24.

The variable cost of the previous package was a
$1.37.

Provide the following information to Carl in an
email

At what volume was the old break-even and what is
the new break-even?

In order to make the same profit how many more
packages needs to be produced?

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