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What is the Cash Break-Even Point in Revenues

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Reference no: EM132999964

Question - The Millers are thinking of introducing a new product line in their store.

Total Fixed Costs for the line $15,000

Total number of units they expect to sell 10,000 units

Total variable costs $20,000

Unit Selling Price $4.50

Depreciation (part of Fixed Costs) $2,000

Profit Objective $4,000

Required - Based on this information, answer the following questions:

1. What is the Break-Even Point in Units?

2. What is the Break-Even Point in Revenue?

3. What is the Cash Break-Even Point in units?

4. What is the Cash Break-Even Point in Revenues?

5. What is the Profit Break Even Point in units?

6. What is the Profit Break-Even Point in Revenues?

7. Should they go ahead with their plan? Why or why not? Sensitivity Analysis.

8. If fixed costs were increased by $5,000 and variable costs and unit selling price remained unchanged, what would be the new PV Ratio and the Break-Even Point in units and in Revenue?

Reference no: EM132999964

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