Calculation of breakeven point for new bricks range

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Reference no: EM13827930

Terracotta Ltd - Newly introduced products under review

Coal Flyash - Coal flyash bricks are made from coal-burning waste. These bricks reduce raw material cost for Terracotta Ltd and reduce waste disposal costs for power plants. The bricks are designed to have better color, physical consistency, weight, compressive strength and thermal conductivity than standard bricks.

Colourbrix - Colourbrix has a range of new and vibrant colors. They do not need to be rendered or painted because the color is infused into the brick. Colourbrix pricing strategy:

Sales price per unit (1000 bricks) $5750
Expected variable costs per unit $3120
Fixed overhead costs to be allocated $2700,000
Estimated unit sales in the first year 4000 units
Desired profit margin 40 percent

What is the approximate break even point in sales dollars for Colourbrix?

A. $4976,000

B. $5903,000

C. $7820,000

D. $10520,000

Addditional Requirement

These kinds of question is based on the Corporate Strategy and describe about the break-even point in sales dollars for a new range of bricks.

Reference no: EM13827930

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