A plant has a capacity of producing 80T units per year of a product which it sells for P20.00 per unit regardless of output. The annual FC are P280T & a variable cost of P480T at 75% capacity. a) What is the break-even point in units? b) What is the fixed cost per unit and variable cost per unit at the break-even point? c) What is the profit at this level (75%) and at 100% capacity? d) At what volume of output will the company incur a loss?
A plant has a capacity of producing 80T units per year of a product which it sells for P20.00 per unit regardless of output. The annual FC are P280T & a variable cost of P480T at 75% capacity. a) What is the break-even point in units? b) What is the fixed cost per unit and variable cost per unit at the break-even point? c) What is the profit at this level (75%) and at 100% capacity? d) At what volume of output will the company incur a loss?
Chapter14: Capital Structure Management In Practice
Section14.A: Breakeven Analysis
Problem 7P
Related questions
Question
) A plant has a capacity of producing 80T units per year of a product which it sells for P20.00 per unit
regardless of output. The annual FC are P280T & a variable cost of P480T at 75% capacity.
- a) What is the break-even point in units?
- b) What is the fixed cost per unit and variable cost per unit at the break-even point?
- c) What is the profit at this level (75%) and at 100% capacity?
- d) At what volume of output will the company incur a loss?
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps with 3 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning
Intermediate Financial Management (MindTap Course…
Finance
ISBN:
9781337395083
Author:
Eugene F. Brigham, Phillip R. Daves
Publisher:
Cengage Learning
Principles of Cost Accounting
Accounting
ISBN:
9781305087408
Author:
Edward J. Vanderbeck, Maria R. Mitchell
Publisher:
Cengage Learning