Question 2 Break-Even AnalysisThere 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, thecomputer will round it to a whole number.QUESTION 2Calculate 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. þunitsWhat would be the break-even units if the price was lowered to $3.00?unitsWhat would be the break-even revenues at a price of $3.00? $ 0What 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, raisingthe price per cup to $3.10?units

Breakeven point is the level of units at which there is no profit and loss. Breakeven point units…

Answered: Break-Even Analysis There are several…

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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Similar questions

Which of the following assumptions of the CVP graph is not true? Multiple Choice Costs are linear. Total fixed expenses are constant within the relevant range. Variable costs go down as volume goes up. The selling prices do not change. Volume is the only factor affecting total cost.
If only the selling price per unit of a product increases (variable cost per unit and total fixed costs do not change), does the breakeven point increase or decrease? Using Break Even Analysis, provide a unique mathematical example to support you
Which of the following statements is true? I. Incremental analysis is an analytical approach that focuses only on those revenues and costs that will not change as a result of a decision. II. When expressed on a per unit basis, fixed costs can mislead decision makers into thinking of them as variable costs. II. To estimate what the profit will be at various levels of sales volume, multiply the number of units to be sold above or below the break-even point by the unit contribution margin. Statements I and III are true. Statements II and III are true. All of the statements are true. None of the statements are true.
How do you calculate Break-even Point? Select one: O a. Fixed cost/ Contribution per unit b. Contribution per unit/ Fixed cost c. Fixed cost/ Sales price per unit d. Fixed cost/ Variable cost per unit
The conventional CVP (Cost-volume and profit) analysis has some underlying assumptions regarding costs and selling price. Which one of the following is NOT one of those assumptions: a. The selling price per unit will remain unchanged. b. Fixed costs per unit will decrease. c. The costs can be expressed as straight lines in a BEP (Break-even-point) graph. d. The actual variable costs per unit vary over the production range.
NOTE: strictly use algebraic approach. Formulas are given in the photo attached thank you
Break-even analysis assumes that: Multiple Choice Total revenue is constant. Unit variable expense is constant. Selling prices must fall in order to generate more revenue.
Which of the following statements about CVP analysis is true? O a. Unit selling price, unit variable costs, and total fixed costs are known and remain constant . b. All of the given answers are false. O . Operating income calculations in CVP analysis are based on gross margin. O d The CVP analysis assumes that total variable costs remain the same over a relevant range .
1. The formula used to calculate the number of units needed in order to earn a target income is a. (Fixed costs + variable costs) / Sales b. (Fixed costs + target income) / Sales c. (Fixed costs + target income) / CM per unit d. (Fixed costs + variable costs) / CM per unit 2. The indifference point is reached when * a. The savings in variable cost is equal to the increase in fixed costs. b. The savings in variable cost is less than the increase in fixed costs. c. The savings in fixed cost is equal to the decrease in variable cost. d. The savings in fixed cost is more than the increase in variable costs.' 3. Which of the following is not an assumption used to prepare a cost-volume-profit graph? * a. Constant sales mix b. Constant cost fluctuations c. Units produced equal units sold d. Liner costs within the relevant range
2. Which of the following pieces of information is not needed to calculate the break- even point in units? Numbers of units sold b. Sales price per unit c. Variable cost per unit d. Total fixed costs e. All of the above are needed
Which of the following would not affect the breakeven point? Oa. A change in variable cost per unit Ob. A change in sales price per unit O C.A change in total fixed cost O d. A change in number of units sold
The break-even point in CVP analysis is defined as the point 1) where output units equal input units. 2) where total revenue equals fixed costs. 3) where revenues less variable costs equal operating income. 4) where the unit contribution margin equals the selling price less the unit variable cost. 5) where total revenue equals total costs.

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