As the owner of the small business, you are tasked to determine the right price for your product before you open your business. In your business, you have a fixed cost of ₱50 000, and the variable cost per unit is ₱100. Using the formula for the break-even point, you must analyze the number of units needed to produce to break-even. You must also observe what will happen to the break-even units as the price approaches zero or infinity.

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter14: Capital Structure Management In Practice
Section14.A: Breakeven Analysis
Problem 7P
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As the owner of the small business, you are tasked to determine the right price for your product before you open your business. In your business, you have a fixed cost of ₱50 000, and the variable cost per unit is ₱100. Using the formula for the break-even point, you must analyze the number of units needed to produce to break-even. You must also observe what will happen to the break-even units as the price approaches zero or infinity.
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