The following is given: Price Variable cost Fixed cost $8.00/unit $4.00/unit $50,000 a) Based on the given information, the break-even point in units = b) Based on the given information, the break-even point in dollars = c) The profit for a volume of 100,000 units = dollars (round your response to the nearest whole number). units (enter your response as a whole number). dollars (round your response to the nearest whole number).

Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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**Break-Even Analysis and Profit Calculation**

**The following is given:**

- **Price:** $8.00/unit
- **Variable cost:** $4.00/unit
- **Fixed cost:** $50,000

**Questions:**

a) Based on the given information, the break-even point in units = [ ] units (enter your response as a whole number).

b) Based on the given information, the break-even point in dollars = [ ] dollars (round your response to the nearest whole number).

c) The profit for a volume of 100,000 units = [ ] dollars (round your response to the nearest whole number).

**Instructions for Calculations:**

1. **Break-Even Point in Units:** 
   - Formula: Break-even point (units) = Fixed Costs / (Price per unit - Variable Cost per unit)
   - Use the given values for calculations.
  
2. **Break-Even Point in Dollars:**
   - Formula: Break-even point (dollars) = Break-even point (units) * Price per unit
   - Calculate based on the break-even point in units.

3. **Profit Calculation for 100,000 Units:**
   - Formula: Profit = (Price per unit * Number of units) - (Variable Cost per unit * Number of units) - Fixed Costs
   - Substitute 100,000 for the number of units to calculate profit.
Transcribed Image Text:**Break-Even Analysis and Profit Calculation** **The following is given:** - **Price:** $8.00/unit - **Variable cost:** $4.00/unit - **Fixed cost:** $50,000 **Questions:** a) Based on the given information, the break-even point in units = [ ] units (enter your response as a whole number). b) Based on the given information, the break-even point in dollars = [ ] dollars (round your response to the nearest whole number). c) The profit for a volume of 100,000 units = [ ] dollars (round your response to the nearest whole number). **Instructions for Calculations:** 1. **Break-Even Point in Units:** - Formula: Break-even point (units) = Fixed Costs / (Price per unit - Variable Cost per unit) - Use the given values for calculations. 2. **Break-Even Point in Dollars:** - Formula: Break-even point (dollars) = Break-even point (units) * Price per unit - Calculate based on the break-even point in units. 3. **Profit Calculation for 100,000 Units:** - Formula: Profit = (Price per unit * Number of units) - (Variable Cost per unit * Number of units) - Fixed Costs - Substitute 100,000 for the number of units to calculate profit.
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