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Montano1993 [528]
2 years ago
8

Fixed costs for a product are $60,000. The product itself sells for $4.00 and it costs $1.00 to make each product. How will the

break-even point for the product change if the variable cost per unit goes up to $1.50?
Business
1 answer:
Kamila [148]2 years ago
4 0

Answer:

The break-even point in units will increase by 400 units.

Explanation:

Giving the following information:

Fixed costs= $60,000

Selling price= $4.00

Unitary variable cost= $1

First, we need to calculate the current break-even point for the current situation.

Break-even point in units= fixed costs/ contribution margin per unit

Break-even point in units= 6,000 / (4 - 1)

Break-even point in units= 2,000 units

<u>Now, the unitary variable cost is $1.5</u>

<u></u>

Break-even point in units= 6,000 / (4 - 1.5)

Break-even point in units= 2,400 units

The break-even point in units will increase by 400 units.

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RUDIKE [14]
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3 0
3 years ago
Read 2 more answers
A firm has the following accounts and financial data for 2007:
Oksi-84 [34.3K]

Answer:

The correct answer is $302.40.

Explanation:

According to the scenario, the computation can be done as:

To calculate firms' earning first we less cost of goods and total operating expenses from sales revenue:

= $3,060 - $1,800 - 600

= $660

Now we deduct the interest expense, then

= $660 - $126

= $534

Now we deduct tax rate, then

= $534 × $213.60    ( $534× 40%)

= $320.40

Now we finally deduct the dividends to get the firm's earning to common shareholder's, then

= $320.40 - 18

= $302.40

Hence, the firm's earning to common shareholder's is $302.40.

5 0
3 years ago
A manufacturer estimates that its product can be produced at a total cost of C(x) = 50,000 + 100x + x3 dollars. If the manufactu
timofeeve [1]

Answer:

The level of production x that will maximize the profit is: 22,966

Explanation:

C(x) = 50,000 + 100x + x³

R(x) = 3400x

P(x) = R(x) - C(x)

      = 3400x - [50,000 + 100x + x³]

      = 3400x - 50,000 - 100x - x³

      = 3300x - 50,000 - x³   .................... (A)

P'(x) = 3300(1) - 0 - 3x²

       = 3300 - 3x²

At a critical point, P'(x) = 0

∴   0 = 3300 - 3x²

  3x² = 3300

    x² = 1100

     x = ± \sqrt{1100}

P"(x) = -6x

P(\sqrt{1100}) = -6 (\sqrt{1100})   < 0

by second derivative, 'P' max at    x = \sqrt{1100} = 33.17 (rounds)

since x =  \sqrt{1100} ,

recall that P(x) = 3300x - 50,000 - x³ from equation (A)

Therefore, Maximum Profit

P(\sqrt{1100}) = 3300\sqrt{1100} - 50000 - \sqrt{1100} ^{3}

              = 3300(33.17) - 50,000 - 33.17³

              = 109461 -50,000 - 36495.26

              = 22,965.74

Maximum profit is 22,966 to the nearest whole number

5 0
3 years ago
Pat can either drive to work, which takes half an hour and uses $1.50 worth of gas, or take the bus, which takes an hour and cos
Harrizon [31]

Answer:

pat should drive if saving half an hour is worth $0.50 or more

Explanation:

Marginal cost is the additional cost generated by producing an additional unit of output.

Marginal cost of taking the bus = 1 / 2 = 0.50

Marginal utility is the additional utility derived from consuming one more unit of a good

Marginal utility per good = marginal utility / price of the good

Pat should take the action that would yield him the highest utility given the marginal cost

So,pat should drive if saving half an hour is worth $0.50 or more

7 0
3 years ago
Mays Corp. reported free cash flows for 2018 of $491 million and investment in operating capital of $321 million. Mays Corp. inc
Anon25 [30]

Answer: $975 million

Explanation:

Given the above details, we can solve for Earnings Before Tax and Interest with the following formula,

Operating Cash Flow = EBIT – Taxes on EBIT + Depreciation

Making EBIT the subject would turn it to be,

EBIT = Operating Cash Flow + Taxes on EBIT - Depreciation

We have all of the above except the EBIT and Operating Cash Flow.

Luckily we can solve for the Operating Cash Flow with the details given using,

Operating cash flow = Free Cash Flow + Investment in operating capital

Therefore,

= $491 million + $321 million

= $812 million

Operating cash flow is $812 million

Plugging it into the original formula we have,

EBIT = Operating Cash Flow + Taxes on EBIT - Depreciation

EBIT = $812 million + $309 million - $146 million

EBIT = $975 million

Earnings before Taxes and Interest is $975 million.

If you need any clarification do react or comment.

5 0
2 years ago
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