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Topic: Business
Number of pages / Number of words: 5 / 1282
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Aunt Connie's Cookies would not want to go beyond the breakeven point of production because it would affect the operating profits and suffer a loss in profits. If Maria decided to go beyond the breakeven point because the new unit could produce more cookies, then she would force the existing unit to reduce volume for Lemon Creme cookies as they were exceeding the monthly production target...


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The variable cost per unit for making the Lemon Creme cookies is higher in the new unit and will result in an overall reduction in profits. By maximizing the new plant capacity, the weighed-average unit contribution margin of the two products could optimize profits.

The three key learning points from the simulation are based on fixed costs, variable costs and breakeven points...


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