Homework Help is Here – Start Your Trial Now!
Business
Operations Management
A producer is currently selling three different brands (Brand A, Brand B, and Brand C) of fountain pens. Brand A is sold for $125 and its variable cost is $40; Brand B is sold for $264 and its variable cost is $66; Brand C is sold for $180 and its variable cost is $72. The producer received a forecast of sales of 2000 units of Brand A, 1500 units of Brand B, and 1200 units of Brand C fountain pens for the coming year from the most recent market research conducted. Suppose the total fixed cost (i.e., rent, equipment, utilities, etc.) is $32500 per month, determine the break-even point in dollars for the coming year. On average, how much sales (in dollars) should be generated each month in order to break-even?

A producer is currently selling three different brands (Brand A, Brand B, and Brand C) of fountain pens. Brand A is sold for $125 and its variable cost is $40; Brand B is sold for $264 and its variable cost is $66; Brand C is sold for $180 and its variable cost is $72. The producer received a forecast of sales of 2000 units of Brand A, 1500 units of Brand B, and 1200 units of Brand C fountain pens for the coming year from the most recent market research conducted. Suppose the total fixed cost (i.e., rent, equipment, utilities, etc.) is $32500 per month, determine the break-even point in dollars for the coming year. On average, how much sales (in dollars) should be generated each month in order to break-even?

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
See similar textbooks
icon
Related questions
Question

Picture

A producer is currently selling three different brands (Brand A, Brand B, and Brand C) of fountain pens. Brand A is sold for $125 and its variable cost is $40; Brand B is sold for $264 and its variable cost is $66; Brand C is sold for $180 and its variable cost is $72. The producer received a forecast of sales of 2000 units of Brand A, 1500 units of Brand B, and 1200 units of Brand C fountain pens for the coming year from the most recent market research conducted. Suppose the total fixed cost (i.e., rent, equipment, utilities, etc.) is $32500 per month, determine the break-even point in dollars for the coming year. On average, how much sales (in dollars) should be generated each month in order to break-even?
Transcribed Image Text:A producer is currently selling three different brands (Brand A, Brand B, and Brand C) of fountain pens. Brand A is sold for $125 and its variable cost is $40; Brand B is sold for $264 and its variable cost is $66; Brand C is sold for $180 and its variable cost is $72. The producer received a forecast of sales of 2000 units of Brand A, 1500 units of Brand B, and 1200 units of Brand C fountain pens for the coming year from the most recent market research conducted. Suppose the total fixed cost (i.e., rent, equipment, utilities, etc.) is $32500 per month, determine the break-even point in dollars for the coming year. On average, how much sales (in dollars) should be generated each month in order to break-even?
Expert Solution
steps

Step by step

Solved in 5 steps with 5 images

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Forecasting methods
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, operations-management and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
Practical Management Science
Practical Management Science
Operations Management
ISBN:
9781337406659
Author:
WINSTON, Wayne L.
Publisher:
Cengage,
Operations Management
Operations Management
Operations Management
ISBN:
9781259667473
Author:
William J Stevenson
Publisher:
McGraw-Hill Education
Operations and Supply Chain Management (Mcgraw-hi…
Operations and Supply Chain Management (Mcgraw-hi…
Operations Management
ISBN:
9781259666100
Author:
F. Robert Jacobs, Richard B Chase
Publisher:
McGraw-Hill Education
Business in Action
Business in Action
Operations Management
ISBN:
9780135198100
Author:
BOVEE
Publisher:
PEARSON CO
Purchasing and Supply Chain Management
Purchasing and Supply Chain Management
Operations Management
ISBN:
9781285869681
Author:
Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:
Cengage Learning
Production and Operations Analysis, Seventh Editi…
Production and Operations Analysis, Seventh Editi…
Operations Management
ISBN:
9781478623069
Author:
Steven Nahmias, Tava Lennon Olsen
Publisher:
Waveland Press, Inc.
SEE MORE TEXTBOOKS