Asked by Sumeet Bhangu on May 01, 2024
Verified
A company makes gadgets selling for $15 each. For 20,000 gadgets, the cost is $3 each, and the estimated fixed costs are $150,000. What is the break-even volume and revenue?
Break-Even Volume
The number of units that must be sold for total revenues to equal total costs, resulting in no profit or loss.
Fixed Costs
Fixed costs are business expenses that remain unchanged regardless of the level of production or sales, such as rent, salaries, and insurance premiums.
Revenue
The total amount of money generated by the sale of goods or services related to a company's primary operations.
- Compute the break-even thresholds in terms of units and monetary value by employing diverse methodologies, and understand the implications.
- Attain expertise in utilizing tools for break-even analysis, such as the graphical method and algebraic formulations.
Verified Answer
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Learning Objectives
- Compute the break-even thresholds in terms of units and monetary value by employing diverse methodologies, and understand the implications.
- Attain expertise in utilizing tools for break-even analysis, such as the graphical method and algebraic formulations.