Find the equation relating Total Cost to sales

Reference no: EM132890555

Question 1. XYZ company's cost function for the next four months is
C = 600,000 + 8Q
a) Find the BEP dollar volume of sales if the selling price is br. 10 / unit
b) What would be the company's cost if it decides to shutdown operations for the next four months
c) If, because of strike, the most the company can produce is br. 100,000/ units, should it shutdown? Why or why not?

Question 2. In its first year, "ABC Co" had the following experience
Sales = 50,000 units Selling price = br. 50
TVC = br. 1,000,000 TFC = br. 250,000
Required:
A. Develop Revenue, cost & profit functions for the co. in terms of quantity.
B. Find the Breakeven point in terms of quantity
C. Convert the cost equation in terms of quantity in to a cost equation in terms of revenue
D. Find the Breakeven revenue
E. If profit had been br. 500,000 what would have been the sales volume (revenue) & the quantity of sales
F. What would have been the profit if sales are br. 2,000,000.

Question 3. A small home business set up with an investment of $ 10,000 for equipment. The business manufactures a product at a cost of br. 0.64 per unit. If the product sales for Br. 1.20 per unit how many units must be sold before the business breaks even?

Question 4. A retail co. plans to work on a margin of 54% of retail price & to incur other Variable Cost of 4%. If is expected fixed cost of Br. 40,000.
i. Find the equation relating Total Cost to sales
ii. Find the profit if sales are Br. 80,000
iii. Find the breakeven revenue
iv. If profit is Br. 20,000 what should be the revenue level?
v. If you have any one item at a price of Br. 20/unit how do you convert the cost equation in terms of revenue in to a cost equation in terms of quantity?

Reference no: EM132890555

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