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A). A product is currently made in a process-focused shop, where fixed costs are $9,000 per year and variable cost is $50 per unit. The firm sells the product for $150 per unit.   What is the break-even point for this operation? What is the profit (or loss) on a demand of 200 units per year?   B). A newly opened bed-and-breakfast projects the following:   Monthly fixed costs                             $10,000 Variable cost per occupied room per night $40 Revenue per occupied room per night      $165   How many rooms would have to be occupied per month in order to break even?

A). A product is currently made in a process-focused shop, where fixed costs are $9,000 per year and variable cost is $50 per unit. The firm sells the product for $150 per unit.   What is the break-even point for this operation? What is the profit (or loss) on a demand of 200 units per year?   B). A newly opened bed-and-breakfast projects the following:   Monthly fixed costs                             $10,000 Variable cost per occupied room per night $40 Revenue per occupied room per night      $165   How many rooms would have to be occupied per month in order to break even?

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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A). A product is currently made in a process-focused shop, where fixed costs are $9,000 per year and variable cost is $50 per unit. The firm sells the product for $150 per unit.

 

What is the break-even point for this operation?

What is the profit (or loss) on a demand of 200 units per year?

 

B). A newly opened bed-and-breakfast projects the following:

 

Monthly fixed costs                             $10,000

Variable cost per occupied room per night $40

Revenue per occupied room per night      $165

 

How many rooms would have to be occupied per month in order to break even?

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