A manufacturing business that is involved in manufacturing and selling a single product. The annual fixed expenses to run the business are $15000 and variable expenses are $7.50 per unit. The sale price of your product is $15 per unit. A. Formulate the total revenue, total cost, and profit B. Find the break-even point quantity and revenue. C. Find the number of units to sell if the estimated profit is $50,000
A manufacturing business that is involved in manufacturing and selling a single product. The annual fixed expenses to run the business are $15000 and variable expenses are $7.50 per unit. The sale price of your product is $15 per unit. A. Formulate the total revenue, total cost, and profit B. Find the break-even point quantity and revenue. C. Find the number of units to sell if the estimated profit is $50,000
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Break even point analysis
1. A manufacturing business that is involved in manufacturing and selling a single product. The annual fixed expenses to run the business are $15000 and variable expenses are $7.50 per unit. The sale price of your product is $15 per unit.
A. Formulate the total revenue, total cost, and profit
B. Find the break-even point quantity and revenue.
C. Find the number of units to sell if the estimated profit is $50,000
D. Find the total profit if the total units sold is 5000 units.
E. Find the units to sell to break-even the fixed expenses.
2. It costs a publishing company 50,000 dollars to make books. The 50,000 is a fixed cost or cost that cannot change. To help the publishing company sell the books, how many books should they sell to break even?
3. A manufacturing company supplies its products to construction job sites. The average monthly fixed cost pee site is $4,500, while each unit cost $35 to produce and selling price is $50 per unit.Determine the monthly break even volume.
4. A store sell t-shirts.The average selling price is $15 and the average variable cost (cost price) is $9. Thus, every time the store sells a shirt it has $6 remaining after it pays the manufacturer. This $6 is referred to as the unit contribution.
A. Suppose the fixed costs of operating the store (its operating expenses) are $ 100,000 per year. Find the break even in units?
B. If the owner desired a profit of $25000, what will be break even point in dollars?
C. If fixed costs rose to $110000, break even in units volume would be?
D. If the average selling price rose to $16, break even volume would fall?
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