1. A shoe manufacturer produces a pair of shoes at a labor cost of P9.00 a pair and a material cost of P8.00 a pair. The fixed charges on the business are P90,000 a month and the variable costs are P4.00 a pair. If the shoes sells at P30 a pair, how many pairs must be produced each month for the manufacturer to break-even.
1. A shoe manufacturer produces a pair of shoes at a labor cost of P9.00 a pair and a material cost of P8.00 a pair. The fixed charges on the business are P90,000 a month and the variable costs are P4.00 a pair. If the shoes sells at P30 a pair, how many pairs must be produced each month for the manufacturer to break-even.
Chapter6: Proudction Costs
Section: Chapter Questions
Problem 8SQP
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Break-even Analysis
![A shoe manufacturer produces a pair of
shoes at a labor cost of P9.00 a pair and a
material cost of P8.00 a pair. The fixed
charges on the business are P90,000 a
month and the variable costs are P4.00 a
pair. If the shoes sells at P30 a pair, how
many pairs must be produced each month
for the manufacturer to break-even.
2.
A local company assembling stereo radio
cassette produces 300 units per month at a
cost of P800.00 per unit. Each stereo radio
cassette sells for P1,200.00. If the firm
makes a profit of 10% on its, 10,000 shares
with a par value of P200.00 per share, and
the total fixed cost are P20,000 per month.
What is the break even point and how much
is the loss or profit if only 100 units are
produced in a given month?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fe33c345a-04af-4518-83d0-668b6c555b62%2Fa0de1c4e-747c-411b-b96e-738c4dedf4e4%2Fm7idvuk_processed.jpeg&w=3840&q=75)
Transcribed Image Text:A shoe manufacturer produces a pair of
shoes at a labor cost of P9.00 a pair and a
material cost of P8.00 a pair. The fixed
charges on the business are P90,000 a
month and the variable costs are P4.00 a
pair. If the shoes sells at P30 a pair, how
many pairs must be produced each month
for the manufacturer to break-even.
2.
A local company assembling stereo radio
cassette produces 300 units per month at a
cost of P800.00 per unit. Each stereo radio
cassette sells for P1,200.00. If the firm
makes a profit of 10% on its, 10,000 shares
with a par value of P200.00 per share, and
the total fixed cost are P20,000 per month.
What is the break even point and how much
is the loss or profit if only 100 units are
produced in a given month?
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