Company WG manufactures 4 categories of instruments such as batch custom, mass produced, one-of-a-kind, and mass customized. It is necessary to set different prices to different categories of instruments to sustain in the business. Person BA, who is the vice president of Company WG, is responsible for setting the price. The recommended retail cost is $349. Person BA calculates Company WG variable and fixed costs to know the breakeven point and profit. Profits and breakeven points are calculated under different conditions to assess the effects of production facility. Characters in case: Company WG Person BA Introduction: Break-even point analysis is used to show the relationship between the total cost and total revenue to determine profits at several stages of output. The break-even point occurs when the total cost and total revenue are equal. To determine: The breakeven point at $349.

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Chapter 13, Problem 4VC

a)

Summary Introduction

Case summary:

Company WG manufactures 4 categories of instruments such as batch custom, mass produced, one-of-a-kind, and mass customized. It is necessary to set different prices to different categories of instruments to sustain in the business. Person BA, who is the vice president of Company WG, is responsible for setting the price.

The recommended retail cost is $349. Person BA calculates Company WG variable and fixed costs to know the breakeven point and profit. Profits and breakeven points are calculated under different conditions to assess the effects of production facility.

Characters in case:

Company WG

Person BA

Introduction:

Break-even point analysis is used to show the relationship between the total cost and total revenue to determine profits at several stages of output. The break-even point occurs when the total cost and total revenue are equal.

To determine: The breakeven point at $349.

b)

Summary Introduction

Case summary:

Company WG manufactures 4 categories of instruments such as batch custom, mass produced, one-of-a-kind, and mass customized. It is necessary to set different prices to different categories of instruments to sustain in the business. Person BA, who is the vice president of Company WG, is responsible for setting the price.

The recommended retail cost is $349. Person BA calculates Company WG variable and fixed costs to know the breakeven point and profit. Profits and breakeven points are calculated under different conditions to assess the effects of production facility.

Characters in case:

Company WG

Person BA

Introduction:

Profit is a gain from the business to an organisation. The gain for the organisation comes from the business activities that exceed the costs, taxes, and expenses.

To determine: The profit, if it sells 2,000 units.

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