Asked by Steven McCoy on Jul 14, 2024
Verified
A product is currently made in a process-focused shop, where fixed costs are $10,500 per year and variable cost is $40 per unit. The firm sells the product for $190 per unit. What is the break-even point for this operation? What is the profit (or loss) on a demand of 300 units per year?
Break-Even Point
The point at which total cost and total revenue are equal, meaning there is no net loss or gain.
Variable Cost
A cost that varies with the level of output or production, such as materials and labor costs.
- Acquire knowledge about the principle of breakeven analysis and how it is applied in business decision-making.
- Calculate and comprehend the effect of fixed and variable expenses on profitability.
Verified Answer
DB
destiny bravoJul 15, 2024
Final Answer :
BEP = 70 units; TR = $57,000, TC = $22,500, therefore Profit = $34,500.
Learning Objectives
- Acquire knowledge about the principle of breakeven analysis and how it is applied in business decision-making.
- Calculate and comprehend the effect of fixed and variable expenses on profitability.
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