What is the break-even point in units

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Reference no: EM132814935

Problem 1:
A manufacturing process has a fixed cost of $180,000 per month. Each unit of product being produced contains $31 worth of material and takes $40 of labor.

How many units are needed to break even if each completed unit has a value of $100?

Problem 2:
A firm uses a serial assembly system and needs answers to the following:

a. An output of 750 units per shift (6.25 hours) is desired for a new processing system. The system requires product to pass through four stations where the work content at each station is 26 seconds. What is the required cycle time for such a system?

b. How efficient is your system with the cycle time you calculated?

c. Station 3 changes and now requires 50 seconds to complete. What will need to be done to meet demand (assume only 6.25 hours are available)? What is the efficiency of the new system?

Problem 3:

A book publisher has fixed costs of $420,000 and variable costs per book of $11.00. The book sells for $30.00 per copy.

a. How many books must be sold to break even?

b. If the fixed cost increased, would the new break-even point be higher or lower?

Higher
Lower
It would remain the same

b. If the fixed cost increased, would the new break-even point be higher or lower?

Higher
Lower
It would remain the same
There is insufficient information to answer this question

c. If the variable cost per unit decreased, would the new break-even point be higher or lower?

Higher
Lower
It would remain the same
There is insufficient information to answer this question

Problem 4:

Owen Conner works part-time packaging software for a local distribution company in Indiana. The annual fixed cost is $10,000 for this process, direct labor is $3.75 per package, and material is $4.50 per package. The selling price will be $15.00 per package.

a. How much revenue do we need to take in before breaking even?

b. What is the break-even point in units?

Reference no: EM132814935

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