Asked by virendra kumar on Jul 22, 2024
Verified
A graphic design studio is considering three new computers. The first model, A, costs $5000. Model B and C cost $3000 and $1000 respectively. If each customer provides $50 of revenue and variable costs are $20/customer, find the number of customers required for each model to break even.
Break Even
The point at which total revenues equal total costs, resulting in neither profit nor loss.
Variable Costs
Costs that change in proportion to the level of activity or volume of production in a business.
- Apprehend the fundamentals of breakeven analysis and its implementation in business strategy planning.
Verified Answer
EW
Emma WilkersonJul 25, 2024
Final Answer :
A: BEP = 5000/(50 - 20) = 166.6 customers
B: BEP = 3000/(50 - 20) = 100 customers
C: BEP = 1000/(50 - 20) = 33.3 customers
B: BEP = 3000/(50 - 20) = 100 customers
C: BEP = 1000/(50 - 20) = 33.3 customers
Learning Objectives
- Apprehend the fundamentals of breakeven analysis and its implementation in business strategy planning.
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