Reference no: EM132479960

Break-Even Analysis: Total Cost = Total Revenue

Bike-for-Health, Inc., produces tandem bicycles. Its costs have been analyzed as follows:

Variable Costs:

Materials              $30/unit

Manufacturing labor           3 hours per unit ($10/hour)

Assembly labor                   1 hour per unit ($10/hour)

Packing materials $5/unit

Packing labor                     20 minutes/unit ($9/hour)

Shipping cost                     $22/unit

Fixed Costs:

Overhead labor                   $50,000 per year

Utilities                              $15,000 per year

Plant Operation                  $65,000 per year

Selling Price:                     $200 per unit

A. Calculate the break-even quantity (Q) for Bike-for-Health, Inc.?

B. What would be the total revenue (TR) that is generated at this break-even quantity?