Question 4 Alpha Manufacturing Inc. is interested to know whether their monthly capacity of 500 units is enough to breakeven given the expenses as follows: variable costs of $15 per unit and fixed costs (such as rent, utilities) of $120,895 per year. The selling price per unit is $70. The owner aims to reach a yearly profit target of $500,000. However, the production supervisor contends that the target is not realistic. Prove that the production supervisor has a point. Answer: The number of units to be produced to achieve the target is units. 4 However, this amount is than the per year of
Question 4 Alpha Manufacturing Inc. is interested to know whether their monthly capacity of 500 units is enough to breakeven given the expenses as follows: variable costs of $15 per unit and fixed costs (such as rent, utilities) of $120,895 per year. The selling price per unit is $70. The owner aims to reach a yearly profit target of $500,000. However, the production supervisor contends that the target is not realistic. Prove that the production supervisor has a point. Answer: The number of units to be produced to achieve the target is units. 4 However, this amount is than the per year of
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:Question 4
Alpha Manufacturing Inc. is interested to know whether their monthly capacity of 500 units is enough to breakeven given the expenses as follows: variable costs of $15 per unit and fixed costs
(such as rent, utilities) of $120,895 per year. The selling price per unit is $70.
The owner aims to reach a yearly profit target of $500,000. However, the production supervisor contends that the target is not realistic. Prove that the production supervisor has a point.
Answer: The number of units to be produced to achieve the target is
units.
4
However, this amount is
than the
per year of
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