Determine the breakeven unit sales

Assignment Help Finance Basics

Reference no: EM1361010

Two companies are rivals in the buggy whip industry. Their manufacturing profiles are as follows:
Co. A Co. B
Unit Selling Price $ 300.00 $ 300.00
Manufacturing Cost/unit 50.0% 66.7%
Staff Salaries & Benefits 150,000 75,000
Advertising 50,000 25,000
Depreciation 40,000 15,000
Interest Cost 50,000 15,000
Other Fixed Costs 25,000 10,000

1. What is the breakeven unit sales for each company?
2. Company A has an investor that will pay off all of its debt and purchase equipment that will lower manufacturing costs by 10%. What is the new breakeven point for Company A? (no change to depreciation.)
3. What else can Company A do to lower its breakeven point to match that of Company B?

Reference no: EM1361010

Questions Cloud

How long will it take until the cars speed : A bat flying in a cave emits a sound and receives its echo 0.37s later. How far away is the cave wall? (Hint: The sound has to travel to the wall and then back again. Use 340 m/s for the speed of sound.)

Explain the company specializes in compact washers : Explain The company specializes in compact washers and dryers for countries where consumers have less living space

Show major commitments of distinctive and specific resources : Choose to sell one's Regional Distribution Center in Asia would be a clear sign of a strategic action.

Create program to produce a summary of amounts due : Create a program that will produce a summary of the amounts due for Pat's Auto Repair Shop. Display a splash screen first, then display the Job Information Form.

Determine the breakeven unit sales : Two Corporation are rivals in the buggy whip industry. Their manufacturing profiles are as follows, determine the breakeven unit sales for each company.

How olivia knows that popeye likes spinach : Olivia knows that Popeye likes spinach as much as $3 in terms of money, he likes tobacco $1 in terms of money, and he dislikes potatoes as much as if he had to pay.

Show key purchasing operations : What are the key purchasing operations issues and why are they key issues and how do you manage these key issues?

Forbearance : When a firm chooses not to react against a competitor's threat is called forbearance. A concept, closely aligned with forbearance is co-opetition; which refers to the combination of both competition and cooperation.

Assistance with stress or emotional issues : What are some indications that may prompt an individual to consult a professional for assistance with stress or emotional issues?

User Account

All Pages