In: Operations Management
Here is a break-even analysis model.
Break-even Analysis |
|
Revenue |
|
Selling Price per unit |
$20 |
Costs |
|
Fixed Costs per unit |
$210,000 |
Variable Cost per unit |
$8 |
Break-even Point |
|
Quantity (Q) |
17,500.00 |
Do the following two tasks.
a. |
Create a strategy table showing how the quantity changes as the selling price varies from $18 to $22. |
|
b. |
Create a strategy table showing how the quantity changes as the selling price varies from $18 to $22 and the variable cost per unit changes from $6 to $10. |
Recall that the Break-even point is when Profit equal zero, or Revenue minus Total Cost equals zero.
Here is the Break-even formula: