Xavi sells seashore paintings. His annual Fixed Costs are $1,000 and the Variable Costs are $8 per painting. After looking at the numbers, Xavi realizes he can only paint about 25 paintings per year and maintain his high quality standards. What would be his breakeven price at this volume of work per year?
Xavi sells seashore paintings. His annual Fixed Costs are $1,000 and the Variable Costs are $8 per painting. After looking at the numbers, Xavi realizes he can only paint about 25 paintings per year and maintain his high quality standards. What would be his breakeven price at this volume of work per year?
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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Xavi sells seashore paintings. His annual Fixed Costs are $1,000 and the Variable Costs are $8 per painting.
After looking at the numbers, Xavi realizes he can only paint about 25 paintings per year and maintain his high quality standards. What would be his breakeven price at this volume of work per year?
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Step 1: Introduction
Solution:
Break- even point is the point of no profit, no loss i.e. where total expenditure equalizes total revenue.
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