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In: Accounting
Breakeven analysis The following Cost and Sales projections were captured by the Acme’s production and Sales/Marketing...
Breakeven analysis
The following Cost and Sales projections were captured by the Acme’s production and Sales/Marketing teams.
Table : Projected costs
|
Gadget |
Factory Set-up ($/year) |
Utilities ($/year) |
Property Taxes ($/year) |
Salary - Engineers $/FTE |
Salary – Hardware technician $/FTE |
Salary – Software technician $/FTE |
Financing costs ($/year) |
|
A |
10,000,000 |
50,000 |
25,000 |
185,000 |
150,000 |
120,000 |
TBD |
|
B |
7,500,000 |
50,000 |
25,000 |
185,000 |
150,000 |
120,000 |
TBD |
|
C |
12,500,000 |
50,000 |
25,000 |
185,000 |
150,000 |
120,000 |
TBD |
Table : Projected sales
|
Gadget |
Production Capacity (Units/year) |
Target Sales at 50% production Capacity (Units/year) |
Target Sales at 75% production Capacity (Units/year) |
Target Sales at 100% production Capacity (Units/year) |
MSRP |
Net Price |
|
A |
250,000 |
125 000 |
187,500 |
250,000 |
449 |
TBD |
|
B |
150,000 |
75,000 |
112,500 |
150,000 |
499 |
TBD |
|
C |
1,000,000 |
500,000 |
750,000 |
1,000,000 |
425 |
TBD |
Run a break-even analysis using the information captured in projected costs and revenues tables and any relevant information from your production, pricing and financing analyses.
Solutions
Expert Solution
Based on the information given, i have made the following assumptions
1. The assumption on Expected Sales based for one year
2. Assumption of number of employees as the amount given below is $ / FTE rate
Based on the given information and above assumptions, please find the below computation of Expected Total sales, Expected Total Costs, Net Income and Total Investment required for the project of the factory setup as well as a working capital requirement :
Statement showing the calculation of Projected Sales
| Gadget | Capacity | Target Sales @ 50% | Target Sales @ 75% | Target Sales @ 100% | Expected Sales # | MSRP | Total Sales value |
| A | 2,50,000 | 1,25,000 | 1,87,500 | 2,50,000 | 1,87,500 | 449 | 8,41,87,500 |
| B | 1,50,000 | 75,000 | 1,12,500 | 1,50,000 | 1,12,500 | 499 | 5,61,37,500 |
| C | 10,00,000 | 5,00,000 | 7,50,000 | 10,00,000 | 7,50,000 | 425 | 31,87,50,000 |
| Total | 45,90,75,000 |
Assuming 1/3 rd of the year with sales at 50% of Capacity, 1/3rd at 75% capacity and rest at 100% capacity.
Statement showing the calculation of Projected Costs
| Gadget | Factory Set up | Utilities / year | Property Taxes / year | Salary - Engineers | Salary - Hardware technicians | Salary - Software technicians | Financing Costs |
| A | 1,00,00,000 | 50,000 | 25,000 | 1,85,000 | 1,50,000 | 1,20,000 | TBD |
| B | 75,00,000 | 50,000 | 25,000 | 1,85,000 | 1,50,000 | 1,20,000 | TBD |
| C | 1,25,00,000 | 50,000 | 25,000 | 1,85,000 | 1,50,000 | 1,20,000 | TBD |
Note: Information of No.of Employees is missing, Hense assumed as 100 FTE's in total.
Statement showing the calculation of Net Operating Income
| A | B | C | D | |
| Factory Set up Cost | 1,00,00,000 | 75,00,000 | 1,25,00,000 | 3,00,00,000 |
| Expected Sales | 8,41,87,500 | 5,61,37,500 | 31,87,50,000 | 45,90,75,00 |
| Salary Costs -Total | 4,55,00,000 | 4,55,00,000 | 4,55,00,000 | 13,65,00,000 |
| Utilities | 50,000 | 50,000 | 50,000 | 1,50,000 |
| Property Taxes | 25,000 | 25,000 | 25,000 | 75,000 |
| Total Costs | 4,55,75,000 | 4,55,75,000 | 4,55,75,000 | 13,67,25,000 |
| Operating Income | 3,86,12,500 | 1,05,62,500 | 27,31,75,000 | 32,23,50,000 |
Statement showing the calculation of Total Investment Required
| Factory Set up Cost | 1,00,00,000 | 75,00,000 | 1,25,00,000 | 3,00,00,000 |
| Working Capital | 4,55,75,000 | 4,55,75,000 | 4,55,75,000 | 13,67,25,000 |
| Total | 16,67,25,000 |
:) Hope You Lied the answer
ekkarill92 answered 1 year agoRelated Solutions
Breakeven analysis The following Cost and Sales projections were captured by the Acme’s production and Sales/Marketing...
Breakeven analysis
The following Cost and Sales projections were captured by the
Acme’s production and Sales/Marketing teams.
Table : Projected costs
Gadget
Factory Set-up ($/year)
Utilities ($/year)
Property Taxes ($/year)
Salary - Engineers
$/FTE
Salary – Hardware technician
$/FTE
Salary – Software technician
$/FTE
Financing costs ($/year)
A
10,000,000
50,000
25,000
185,000
150,000
120,000
629.69
B
7,500,000
50,000
25,000
185,000
150,000
120,000
473.44
C
12,500,000
50,000
25,000
185,000
150,000
120,000
785.94
Table : Projected sales
Gadget
Production Capacity (Units/year)
Target...
Breakeven analysis The following Cost and Sales projections were captured by the Acme’s production and Sales/Marketing...
Breakeven analysis
The following Cost and Sales projections were captured by the
Acme’s production and Sales/Marketing teams.
Table : Projected costs
Gadget
Factory Set-up ($/year)
Utilities ($/year)
Property Taxes ($/year)
Salary - Engineers
$/FTE
Salary – Hardware technician
$/FTE
Salary – Software technician
$/FTE
Financing costs ($/year)
A
10,000,000
50,000
25,000
185,000
150,000
120,000
TBD
B
7,500,000
50,000
25,000
185,000
150,000
120,000
TBD
C
12,500,000
50,000
25,000
185,000
150,000
120,000
TBD
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