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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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If an investment is producing a return that is equal to the required return, the investment's net present value will be:
harina [27]
The net present value would be zero.

Hope this helped! :)
4 0
3 years ago
Larkspur Corporation manufactures drones. On December 31, 2019, it leased to Althaus Company a drone that had cost $104,800 to m
Lady_Fox [76]

Answer:

First find the present value of the lease. Payments are constant and fixed so this is an annuity. As it is to be paid from the beginning, it is an Annuity due.

= Annuity * Present value interest factor of annuity due, 5 years, 7%.

= 37,400 * 4.3872

= $164,081

Date                          Account Details                            Debit              Credit

Dec. 31, 2019            Lease Receivable                         $164,081

                                 Cost of goods sold                       $104,800

                                 Sales                                                                    $164,081

                                 Inventory                                                             $104,800

Date                          Account Details                           Debit                Credit

Dec. 31, 2019           Cash                                             $37,400

                                 Lease Receivable                                               $37,400

5 0
2 years ago
A market system tends to restrict business risk to owners and investors. This results in which of the following benefits?
In-s [12.5K]

Answer: d)Firms have to pay more to attract inputs, as these inputs have to share the risk.

Explanation: When the market system tries to put restriction on the business risk to owner and other investors , the firms have to give more payment to attract them to market business.

The chances of risk have have to be shared by both the parties so the owners or investors are going to indulge in the business when they gain some benefit e.g.-more payment.

Other options are incorrect because entrepreneurship will not be encouraged through this process. Incomes will not be distributed equally and neither the prudent risk management will be aimed.Thus, the correct option is option(d).

7 0
2 years ago
What is the basic economic problem?
photoshop1234 [79]
It’s either c or d they make the most science honestly I’d say d tho
5 0
3 years ago
A hardware store makes a profit of $30,000 during its first year. The store owner sets a goal of increasing profits by $4000 eac
MrMuchimi

Answer:

$294,000

Explanation:

Data provided in the question:

Profit during the first year = $30,000

Increase in profit each year = $4,000

Now,

Profit for the current year = Profit for the previous year + $4,000

Therefore,

Year                 Current year profit

1                           $30,000

2                           $34,000                   [$30,000 + $4.000]

3                           $38,000                   [$34,000 + $4.000]

4                           $42,000                   [$38,000 + $4.000]

5                           $46,000                   [$42,000 + $4.000]

6                           $50,000                   [$46,000 + $4.000]

7                           $54,000                   [$50,000 + $4.000]

Hence,

The total profit during the first 7 years of business = ∑ (Current year profit)

= $30,000 + $34,000 + $38,000 + $42,000 + $46,000 + $50,000 + $54,000

= $294,000

4 0
2 years ago
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