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Break-Even Analysis There are several formulas that will be helpful for this assignment: • Break-Even Units = Fixed Costs / (Price - Unit Variable Cost) • Break-Even Price = Variable Cost + (Fixed Costs / Projected Units) • Break-Even Revenues = Break-Even Units x Price • Target Profit Break-Even Units (Fixed Costs + Target Profit) / (Price - Unit Variable Cost) Note that you can't sell a fraction of a unit (e.g., a half a cup of coffee). So, if you enter a number of units with a decimal, the computer will round it to a whole number. QUESTION 2 Calculate the break-even units if fixed costs are $11,000 and coffee has a price and cost of $3.30 and $0.30 per cup, respectively. þ units What would be the break-even units if the price was lowered to $3.00? units

Break-Even Analysis There are several formulas that will be helpful for this assignment: • Break-Even Units = Fixed Costs / (Price - Unit Variable Cost) • Break-Even Price = Variable Cost + (Fixed Costs / Projected Units) • Break-Even Revenues = Break-Even Units x Price • Target Profit Break-Even Units (Fixed Costs + Target Profit) / (Price - Unit Variable Cost) Note that you can't sell a fraction of a unit (e.g., a half a cup of coffee). So, if you enter a number of units with a decimal, the computer will round it to a whole number. QUESTION 2 Calculate the break-even units if fixed costs are $11,000 and coffee has a price and cost of $3.30 and $0.30 per cup, respectively. þ units What would be the break-even units if the price was lowered to $3.00? units

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Break-Even Analysis There are several formulas that will be helpful for this assignment: • Break-Even Units = Fixed Costs/ (Price - Unit Variable Cost) • Break-Even Price = Variable Cost + (Fixed Costs / Projected Units) • Break-Even Revenues Break-Even Units x Price • Target Profit Break-Even Units = (Fixed Costs + Target Profit) / (Price - Unit Variable Cost) Note that you can't sell a fraction of a unit (e.g., a half a cup of coffee). So, if you enter a number of units with a decimal, the computer will round it to a whole number. QUESTION 2 Calculate the break-even units if fixed costs are $11,000 and coffee has a price and cost of $3.30 and $0.30 per cup, respectively. þ units What would be the break-even units if the price was lowered to $3.00? units What would be the break-even revenues at a price of $3.00? $ 0 What would be the break-even units if the cost of coffee per cup increased by $0.10 to $0.40 and the cafe decided to pass on the $0.10 cost increase to customers, raising the price per cup to $3.10? units
Transcribed Image Text:Break-Even Analysis There are several formulas that will be helpful for this assignment: • Break-Even Units = Fixed Costs/ (Price - Unit Variable Cost) • Break-Even Price = Variable Cost + (Fixed Costs / Projected Units) • Break-Even Revenues Break-Even Units x Price • Target Profit Break-Even Units = (Fixed Costs + Target Profit) / (Price - Unit Variable Cost) Note that you can't sell a fraction of a unit (e.g., a half a cup of coffee). So, if you enter a number of units with a decimal, the computer will round it to a whole number. QUESTION 2 Calculate the break-even units if fixed costs are $11,000 and coffee has a price and cost of $3.30 and $0.30 per cup, respectively. þ units What would be the break-even units if the price was lowered to $3.00? units What would be the break-even revenues at a price of $3.00? $ 0 What would be the break-even units if the cost of coffee per cup increased by $0.10 to $0.40 and the cafe decided to pass on the $0.10 cost increase to customers, raising the price per cup to $3.10? units
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