Determine the breakeven point

Assignment Help Business Economics

Reference no: EM131807872

A firm believes a product's sales volume (S) depends on its unit selling price (P) as S = $100- P. The production cost (C) is $1000 + 10S.

(a) Draw a graph with the sales volume (S) from 0 to 100 on the x axis, and total cost and total income from $0 to $2500 on the y axis. On the graph draw the line C = $1000 + 10S. Then plot the curve of total income. Mark the breakeven points on the graph.

(b) Determine the breakeven point (lowest sales volume at which total sales income just equals total production cost). (Hint: This may be done by trial and error or by using the quadratic equation to locate the point at which profit is zero.)

Reference no: EM131807872

Questions Cloud

Show an amortization schedule by the straight-line method : The bonds were issued at $96,768 to yield an annual return of 10%. Show an amortization schedule by the straight-line method

Determining the cause of death : Determine at the 5% significance level whether the cause of death depends on the method of losing weight.

Relationship between cost and production quantity : Mr. Sam Spade, the president of Ajax, recently read in a report that a competitor named Bendix has the following relationship between cost and production;

Create a classified balance sheet in good form : Please create a classified balance sheet in good form for the year ended 2012

Determine the breakeven point : Draw a graph with the sales volume (S) from 0 to 100 on the x axis, and total cost and total income from $0 to $2500 on the y axis. On the graph draw the line

Determine the departmental factory overhead rates : Bardot Marine manufactures two types of boats: speedboats and bass boats. Determine the departmental factory overhead rates for both departments

Automated process to be preferred : How many units must be produced and sold at $197 each for the automated process to be preferred to the labor-intensive process.

Costs of producing a new product : Heinrich is a manufacturing engineer with the Miller Company. He has determined the costs of producing a new product to be as follows:

Calculate the gross profit percentage : Calculate the balance of Retained Earnings that would appear on a balance sheet at December

User Account

All Pages