What is the break-even point

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Q1) A manager has determined that a potential new product can be sold at a price of $29.50 each. The cost to produce the product is $22.00, but the equipment necessary for production must be leased for $120,000 per year. What is the break-even point?

Q2) A manager has determined that a potential new product can be sold at a price of $10.00 each. The cost to produce the product is $5.00, but the equipment necessary for production must be leased for $25,000 per year. What is the break-even point? (Using excel)

Q3) Production has indicated that they can produce widgets at a cost of $4.00 each if they lease new equipment at a cost of $10,000. Marketing has estimated the number of units they can sell at a number of prices (shown below). Which price/volume option will allow the firm to avoid losing money on this project?

Q4) In order to produce a new product, a firm must lease equipment at a cost of $25,000 per year. The managers feel that they can sell 10,000 units per year at a price of $15.00. What is the highest variable cost that will allow the firm to at least break even on this project?

Q5) In order to produce a new product, a firm must lease equipment at a cost of $190,000 per year. The managers feel that they can sell 68,000 units per year at a price of $93. What is the highest variable cost that will allow the firm to at least break even on this project?

Q6) A manager has determined that a potential new product can be sold at a price of $50.00 each. The cost to produce the product is $35.00, but the equipment necessary for production must be leased for $100,000 per year. What is the break-even point?

Reference no: EM132935398

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