Question
In: Economics
Given: the following information Variable cost per unit = $1.25 Selling price per unit = $1.00...
Given: the following information
Variable cost per unit = $1.25
Selling price per unit = $1.00
Fixed Cost/Month = $40,000
Solve for:
A.) How many units per month must be produced to break-even (Q)?
Given:
The following information:
Variable cost per unit = $1.25
Q = Breakeven quantity units per month solved in part a .
Fixed Cost/Month = $40,000
New selling price = ?? (Solve for)
Solve for:
B.) What should the new selling price must be in order to make $10,000 monthly profit by monthly production quantity (Q) at the breakeven level, variable cost per unit at $1.25/unit, and monthly fixed cost at $40,000 per month?
Solutions
Expert Solution
Q-A :: ANSWER :: -160000 unit
=> Break-Even Point = Fixed Cost/ [ Price - Variable Cost ]
= $40000/[ $1.00 - $1.25 ]
= $40000/ -0.25
= -160000 Unit
Q-B :: ANSWER ::0.93
=> Break Even Point = Fixed Cost + Profit/ [ Price - Variable Cost ]
If We Assume That Price Is X Then
-160000 = $40000+$10000/[ X - $1.25 ]
-160000 = $50000 / X - $1.25
-160000x + 200000 = 50000
So - 160000x = 50000-200000
-160000x = -150000
X = -150000/-160000
X = 0.93
=> 0.93 should Be the new selling price must be in order to make $10,000 monthly profit by monthly production quantity (Q) at the breakeven level
Rahul Sunny answered 1 year agoRelated Solutions
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