3) Rane Brake Linings manufactures brake pads in a process focused facility; the fixed costs are nine thousand dollars per year, the variable cost is fifty dollars per brake pad, each brake pad sells for two hundred dollars. a) Calculate the breakeven point (in units) for this operation.b) Calculate the breakeven point (in $) for this operation.c) Calculate the profit/loss on a demand of two hundred brake pads per year. Note: You could work out the problem by hand or use excel; in chapter 5, section 5.11 of the Stevenson text, evaluating alternatives (cost volume analysis) is covered with examples; chapter 5 Stevenson lecture power point slides 34 to 44 (chapter 5 lecture: 29.49 mins to 38.87 mins) cover cost volume analysis with examples.

Detailed explanation:Given: Fixed Costs, $ 9000 per year, Variable Cost $ 50 per brake padSelling…

Answered: 3) Rane Brake Linings manufactures…

Marketing

20th Edition

ISBN:9780357033791

Author:Pride, William M

Publisher:Pride, William M

Chapter19: Pricing Concepts

Section: Chapter Questions

Problem 6DRQ

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3) Rane Brake Linings manufactures brake pads in a process focused facility; the fixed costs are nine thousand dollars per year, the variable cost is fifty dollars per brake pad, each brake pad sells for two hundred dollars.

a) Calculate the breakeven point (in units) for this operation.
b) Calculate the breakeven point (in $) for this operation.
c) Calculate the profit/loss on a demand of two hundred brake pads per year.

Note: You could work out the problem by hand or use excel; in chapter 5, section 5.11 of the Stevenson text, evaluating alternatives (cost volume analysis) is covered with examples; chapter 5 Stevenson lecture power point slides 34 to 44 (chapter 5 lecture: 29.49 mins to 38.87 mins) cover cost volume analysis with examples.

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