Assume a fixed cost of $900, a variable cost of $4.25, and a selling price of $6.00. a. What is the break-even point? (Roundup your answer to the next whole number.) Break-even point units
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The break-even point is indeed the moment at which total cost and total income are equal, indicating that your small firm is not losing money. In other words, you've reached the point in manufacturing where the expenses of production are equal to the product's profits. This is certainly a vital calculation in each and every new firm's business strategy. Potential investors in an establishment want to know not only what kind of return they can expect but also when they will see that return. This seems to be attributed to the reason that some businesses take years to break even, typically losing money in the first several months or even years.
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- The selling price per box for Cynthia's Cookies is $20.24. Fixed costs are $60,000 and the variable cost per box is $10.43. What is the break-even quantity? Round your answer to the nearest whole number. boxes If sales last year were 8,700 boxes, what was the net profit? Round your answer to the nearest dollar. $Dominos is planning to introduce two new pizzas (Cauliflower and Calamari). Financial data related to producing these two new pizzas are summarized in the table below. a. If these two new pizzas are sold such that the ratio of Cauliflowers over Calamaris is 4:3, what is the break-even point? b. If the product mix has changed to five Cauliflowers to five Calamaris, what would happen to the break-even point? c. In order to maximize the profit, which product mix should be pushed? d. If both pizzas must go through the same oven and there are only 30,000 oven hours available per period, which product should be pushed to market? Assume that Cauliflower pizza takes 30 minutes and Calamari pizza takes 15 minutes in the oven. Cauliflower Pizza Calamari Pizza Selling Price $10 $12 Variable Costs $5 $10 Fixed Costs $2,000 $600Two competitors have the cost structure shown below. Which of the following statements are true Firm A Firm B Product 1 Units 500 200 Total costs (P1) $50,000 $18,000 Product 2 Units 500 1200 Total costs (P2) $100,000 $144,000 Total costs (P1 + P2) $150,000 $162,000 A. Firm A should lower its price on Product 2 B. Firm B is the low-cost producer. C. Firm B should lower its price on Product 1 and Product 2 D. Firm A is the low-cost producer E. Both A and B are true
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- Par Inc., is a small manufacturer of golf equipment and supplies. Par's distributor believes a market exists for both a medium-priced golf bag, referred to as a standard model, and a high-priced golf bag, referred to as a deluxe model. The distributor is so confident of the market that, if Par can make the bags at a competitive price, the distributor will purchase all the bags that Par can manufacture over the next three months. A careful analysis of the manufacturing requirements resulted in the following table, which shows the production time requirements for the four required manufacturing operations and the accounting department's estimate of the profit contribution per bag: PRODUCTION TIME (HOURS) PRODUCT, CUT & DYE, SEWING, FINISHING, INSPECTION & PACKAGING, PROFIT/BAGSTANDARD 7/10, 1/2, 1, 1/10, DELUXE 1, 5/6, 2/3, ¼ The director of manufacturing estimates that 630 hours of cutting and dyeing time, 300 hours of sewing time, 708 hours of finishing time, and 270 hours of…Total Cost equals the fixed cost plus variable cost per unit divided by volume? True FalseA book publisher has fixed costs of $300,000 and variable costs per book of $8.00. The book sells for $23.00 per copy. If the variable cost per unit decreased, would the new break-even point be higher or lower?