ABC Company has the following information: Variable Cost per Unit is P 15; Fixed Expenses is P54,000; and Selling Price per Unit is P20. What should be the selling price per unit if break-even point is brought down to 6,000 units?
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- ABC Company has the following information: Variable Cost per Unit is P 15; Fixed Expenses is P54,000; and Selling
Price per Unit is P20. What should be the selling price per unit if break-even point is brought down to 6,000 units? - ABC Company has the following information: Variable Cost per Unit is P 15; Fixed Expenses is P54,000; and Selling Price per Unit is P20. If the company will only sell 10,000 units for the month, how much profit or loss will they get?
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- A small-scale industry sells its products at P2.80 per unit. The variable cost is P1.80 per unit. The total fixed cost is P20,000. Determine the following: The break-even quantity and revenue The profit (or loss) at a sales volume of P15,000 units How can profit be generated if there is a loss in (b) Up to how much should the selling price per unit be increased or decreased to break-even at 15,000, assuming that FC and UVC remain constant.The demand and cost function for a company are estimated to be as follows: P = 100 - Q TC = 50 + 80Q -10Q2 + 0.6Q3 What price should the company charge if it wants to maximize its profit in the short run? What price should it charge if it wants to maximize its revenue in the short run Suppose the company lacks confidence in the accuracy of cost estimates expressed in a cubic equation and simply wants to use a linear approximation. Suggest a linear representation of this cubic equation. What difference would it make on the recommended profit-maximizing and revenue-maximizing pricesAB Company is contemplating whether to temporarily stop operating for the next 4 months since the demand declines below the breakeven point. The company has a normal operating fixed cost of $50,000 per month and if they shut down they could eliminate $20,000 fixed costs per month, however, they would incur additional costs for insurance and security guards for the entire shut down period amounting to $25,000. They estimated that restarting costs will be $20,000. At present, they have a selling price of $50 per unit and variable costs of $30. For the next 4 months they will be forced to reduce their selling price to $40 per unit if they will continue operating. Determine the shut down point a. 2,500 b. 4,000 c. 3,000 d. 3,500
- A manufacturer of Chocolate has a fixed cost of Tk.60000 and variable cost is Tk.7 perproduced Chocolate. Selling price is Tk.10 per Chocolate.Requirement- At what number of units will break even occur and At what sales (revenue) volume will break occur?Given the following information, how many units must be sold to achieve a profit of $25,000? [Note that the units sold must account for total production costs (direct and overhead) plus desired profit.]You are asked to recommend whether a firm should make or purchase product A. The following are data concerning the two options. For the purchase option, the firm can buy product A at $20 per unit. For the make option, the firm can produce product A based on the following cost estimation data. The firm has to pay a weekly rental payment of $20,000 for the production facility. With the use of this facility, the firm also has to hire five operators to help make product A. Each operator works eight hours per day, five days per week at the rate of $10 per hour. In other words, the rental and labor expenses are fixed costs. The material cost for the make option is $15 per unit of product A. Solve, a. Find a weekly amount of product A that provides the breakeven point for the firm. The breakeven point in this problem indicates the firm’s indifference between purchasing or making product A. b. If the firm estimates the sale of product A to be 3,500 units per week, should it make or purchase…
- Exotic Metals, Inc., a leading manufacturer of beryllium, which is used in many electronic products, estimates the following demand schedule for its product:PRICE ($/POUND) QUANTITY (POUNDS/PERIOD)$25 018 1,00016 2,00014 3,00012 4,00010 5,0008 6,0006 7,0004 8,0002 9,000Fixed costs of manufacturing beryllium are $14,000 per period. The firm’s variable cost schedule is as follows:OUTPUT (POUNDS/PERIOD) VARIABLE COST (PER POUND)0…You are asked to recommend whether a firm should make or purchase product A. The following are data concerning the two options. For the purchase option, the firm can buy product A at $24 per unit. For the make option, the firm can produce product A based on the following cost estimation data. The firm has to pay a weekly rental payment of $30,800 for the production facility. With the use of this facility, the firm also has to hire five operators to help make product A. Each operator works eight hours per day, five days per week at the rate of $14 per hour. In other words, the rental and labor expenses are fixed costs. The material cost for the make option is $17 per unit of product A. a. Find a weekly amount of product A that provides the breakeven point for the firm. The breakeven point in this problem indicates the firm's indifference between purchasing or making product A. b. If the firm estimates the sale of product A to be 6,400 units per week, should it make or purchase product…A manufacturing plant has a potential production capacity of 1,000 units per month (capacity can be increased by 10 percent if subcontractors are employed). The plant is normally operated at about 80 percent of capacity. Operating the plant above this level significantly increases variable costs per unit because of the need to pay the skilled workers higher overtime wage rates. For output levels up to 80 percent of capacity, variable cost per unit is $100. Above 80 percent and up to 90 percent, variable costs on this additional output increase by 10 percent. When output is above 90 percent and up to 100 percent of capacity, the additional units cost an additional 25 percent over the unit variable costs for outputs up to 80 percent of capacity. For production above 100 percent and up to 110 percent of capacity, extensive subcontracting work is used and the unit variable costs of these additional units are 50 percent above those at output levels up to 80 percent of capacity. At 80…
- Suppose that the ABC Corporation has a production (and sales) capacity of $1,000,000 per month. Its fixed costs—over a considerable range of volume—are $350,000 per month, and the variable costs are $0.50 per dollar of sales.a) What is the annual breakeven point volume (D')? b) What would be the effect on D' of decreasing the variable cost per unit by 25% if the fixed costs thereby increased by 10%?c) What would be the effect on D' if the fixed costs were decreased by 10% and the variable cost per unit were increased by the same percentage?A company produces an electronic timing switch that is used in consumer and commercial products. The fixed cost is $70,000 per month and the variable cost is $80 per unit. If the selling price per unit is p = $170 − 0.01(D), calculate the following: a) The optimal volume for this product (Demand)? b) The value of selling price per unit at the optimal volume calculated in part a for this product ?. A refiner in city Q serves four customers near city W and maintains consignment inventory (owned by the refiner) at each location. Currently, the refiner uses TL (truckload) transportation to deliver separately to each customer. Each truck costs $(759) plus $(309) per stop. The refiner is considering aggregating deliveries to city W on a single truck. The demand of the first customer is 75 tons a year, the demand of the second customer is 30 tons per year, and the demand of the third and fourth customers is 10 tons per year. The product cost is $8,000 per ton, and it uses a holding cost of (24)%. The truck capacity is 20 tons. a. What is the optimal delivery policy to each customer if the refiner ships separately to each of them? What is the annual total inventory-related cost? b. What is the optimal delivery policy to each customer if the refiner aggregates shipments to each of the four customers on every truck that goes to city W? What is the annual total inventory-related cost?…
