Reference no: EM13758142
Break Even Analysis Exercises - SHOW WORK PLEASE. Thank you, I don't know how to get the proper answer.
1. SoftCo is a local distribution company in NJ. The annual fixed cost $10,000 for their packaging process, direct labor is $3.2 per package and material is $4.8 per package. The selling price will be $12.5 per package.
a) What is the break-even point in units?
b) How much revenue do they need to take in before breaking even?
2. AudioCo is currently manufacturing an adapter that has a variable cost of $0.5 per unit and selling price of $1.0 per unit. Fixed costs are $14,000. Current sales volume is 30,000 units. The firm can substantially improve the product quality by adding a new piece of equipment at an additional fixed cost of $6,000. Variable costs will increase from $0.5 per unit to $0.6 per unit, and sales volume should jump to 45,000 units due to a higher-quality product.
a) Does AudioCo make profit in current conditions? Show your work.
b) Should AudioCo buy the new equipment?
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Break even analysis exercises
: SoftCo is a local distribution company in NJ. The annual fixed cost $10,000 for their packaging process, direct labor is $3.2 per package and material is $4.8 per package. The selling price will be $12.5 per package. What is the break-even point in u..
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