Memo 2 - There are a few reasons as to why the income...

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Memo To: Professor Merell From: CC: Date: 10:35:51 Re: Memo #2 The attached contains various calculations which are useful to many businesses. First, the Cost Function of Fruits for You, Inc. is given. The cost function is a function of input prices and output quantity and is useful for determining what effect change may have on the business. Next, the Break-Even Point is shown, both for cases and in sales dollars. This is used to find the level of sales at which the contribution margin covers fixed costs. Finally, two situational calculations were made. Sales volume was calculated in respect to after-tax profit and after-tax profit was calculated in respect to sales volume.
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Unformatted text preview: There are a few reasons as to why the income determined in part four is unrealistic. First, one cannot expect to increase sales by 25% in one year. His target market has not increased at all so such a large increase in sales is improbable. Next, such an increase in sales volume would also warrant a proportional increase in costs, inventory space, and processing space. Many more workers would need to be hired and more fertilizers and other costs would rise. 1 Finally, the logistics of increasing the business such a large amount in such a short time are nigh impossible. 2...
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Memo 2 - There are a few reasons as to why the income...

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