Break-even analysis Show all your solutions. 1. The Fixed Cost is P4,000. The material and labor costs are P4.00 per unit. The supplier’s selling price is P5.00 per unit. The break-even point is
Break-even analysis Show all your solutions.
1. The Fixed Cost is P4,000. The material and labor costs are P4.00 per unit. The supplier’s selling price is P5.00 per unit. The break-even point is
2. Production has indicated that they can produce widgets at a cost of P4.00 each if they lease new equipment at a cost of P10,000. Marketing has estimated the number of units they can sell at a number of prices (Php4000) Which price/volume option will allow the firm to avoid losing money on this project?
3. A food repacking company estimates sales figures of Php15.5M for their most popular item. Assuming that the item sells at Php375 each, fixed costs are Php4M, and variable cost are Php215 per unit repacked.
a. What is the break-even sales volume?
b. Find the corresponding profit figures if the actual sales will be as estimated.
4. A manufacturer can sell a certain health supplement for P1,100 per unit. Its total cost consists of a fixed
a. How many units must the manufacturer sell to break even?
b. What is the manufacturer's profit or loss if 100 units are sold?
c. How many units must be sold for the manufacturer to realize a profit of Php12,500
5. Power Notebooks, Inc. plans to manufacture a new line of notebook computers. Management is trying to decide whether to purchase the LCD screens for the computers from an outside supplier or to manufacture the screens in-house. The screens cost $100 each from the outside supplier. To set up the assembly process required to produce the screens in-house would cost $100,000. The company could then produce each screen for $75. The number of notebooks that eventually will be produced (Q) is unknown at this point.
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