**Break-Even Analysis for Service Hours at Qwicks Solutions**Qwicks Solutions is a consulting firm that offers engineering services at a rate of $1,000 per hour. The firm incurs a cost of $1,000,000 per year for management personnel, workspace, and equipment necessary to provide these services. Engineers are compensated at $475 per hour for their work.**Objective:** Determine the breakeven number of service hours for the company.**Details:**- **Service Price:** $1,000 per hour- **Annual Fixed Costs:** $1,000,000- **Variable Cost (Engineer Pay):** $475 per hourTo find the breakeven point, consider the formula:Breakeven Hours = Fixed Costs / (Price per Hour - Variable Cost per Hour)The breakeven analysis involves understanding both fixed and variable costs to determine the number of service hours needed to cover all costs without making a profit or loss.This type of calculation is crucial for businesses to ensure operational sustainability and financial viability.

The break-even point is the point at which total cost and total revenue are equal.

Answered: Qwicks Solutions is a consulting firm…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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A marketer wants to run pre-roll video ads on YouTube before videos for local music artists. What are the options? A sponsored ads, sponsored cards, and sponsored keyword ads. B bumper ads, non-skippable video ads, and skippable video ads. C display ads, non-skippable video ads, and sponsored cards. masthead ads, pay-by-impression ads, and bumper ads.
A manufacturer sells a particular product in both Brazil and the U.S. In Brazil, the manufacturer has been selling 4,900 units per year of the product at a price of $200 and a contribution margin of 25 percent. For sales of this product in Brazil, calculate the breakeven sales level for a $20 price increase. Show your work. In the U.S., the manufacturer’s price for this product is $400 and the contribution margin is 50 percent. The manufacturer knows that, because of gray market commerce, every one-unit change of sales of this product in Brazil leads to a 0.15-unit sales change in the opposite direction in the U.S. Given this information, recalculate the breakeven sales level in Brazil described in Part a. Show your work. Using the course material, describe the concept of a price corridor. Then explain how the difference between the breakeven you calculated in Part (b) and the one you calculated in Part (a) is helpful for applying the price-corridor concept in this situation.
EMERGENCY! Production just informed management that one of its five glycol squeezers has been destroyed by a rogue computer virus. Production capability is now only 23000 gallons at most. The squeezer cannot be fixed and IceLess cannot afford a replacement. This breakdown will NOT lower fixed costs. This breakdown will not change variable cost per unit, either. If only 23000 gallons are produced, and the earning target remains $94400 above fixed costs, what price per gallon must now be charged? (show your calculations What is the Contribution Margin Ratio (CMR) if the price is $8.82 per gallon? At a price of $10.95 per gallon, what will be the DOL (assume 23000 gallons are sold , that $94400 above fixed costs is to be earned, and that other costs are as initially given)(show your calculations).
Engineering economy: The fixed costs incurred by the engineering department are $280,000 per year. Variable costs are 20% of the annual revenue. If annual revenue is $560,000, determine the annual profit or loss.
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Show full work, no excel please
Find the attached file.
Alfarah Company estimates that variable costs will be 50% of selling price per unit, and fixed costs will total 500,000 The selling price of the product is $5. Instructions 1. Compute the break-even point in (a) units and (b) dollars. 2. Prepare a CVP graph, assuming maximum sales of $3,200,000, (Note: Use$400,000 increments for sales and costs and 100,000 increments for units.) 3. Assuming actual sales are $2million, compute the margin of safety in (a) dollars and (b)as ratio. Note, Variable costs: 50% of the selling price per Fixed costs: $500,000 Selling price per unit: $5 Maximum sales: $3,200,000 Actual sales: $2,000,000 unit

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