Using break-even analysisA new product is expected to have sales of $100,000, variable costs of 60% of sales, and fixed costs of $20,000.1. Using graph paper, construct a break-even chart and label the sales line, total cost line, fixed cost line, break-even point, and net income and net loss areas.2. From the chart, identify the break-even point and the amount of income or loss if sales are $100,000.
Using break-even analysisA new product is expected to have sales of $100,000, variable costs of 60% of sales, and fixed costs of $20,000.1. Using graph paper, construct a break-even chart and label the sales line, total cost line, fixed cost line, break-even point, and net income and net loss areas.2. From the chart, identify the break-even point and the amount of income or loss if sales are $100,000.
Chapter14: Capital Structure Management In Practice
Section14.A: Breakeven Analysis
Problem 7P
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Using break-even analysis
A new product is expected to have sales of $100,000, variable costs of 60% of sales, and fixed costs of $20,000.
1. Using graph paper, construct a break-even chart and label the sales line, total cost line, fixed cost line, break-even point, and net income and net loss areas.
2. From the chart, identify the break-even point and the amount of income or loss if sales are $100,000.
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