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AleksAgata [21]
3 years ago
12

A company makes travel umbrellas. Its fixed costs are $1000 a week and its variable costs for one batch of umbrellas per week is

$500 for 2000 units. After doing market research, the company sets the price per umbrella at $11. What is the break-even quantity for a week’s worth of umbrellas?
Business
1 answer:
Lady_Fox [76]3 years ago
3 0

Answer:

Break-even point in units= 93 units

Explanation:

Giving the following information:

Its fixed costs are $1000 a week and its variable costs for one batch of umbrellas per week are $500 for 2000 units.

After doing market research, the company sets the price per umbrella at $11.

Unitary variable cost= 500/2,000= $0.25

To calculate the break-even point in units, we  need to use the following formula:

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

Break-even point in units= 1,000/ (11 - 0.25)

Break-even point in units= 93 units

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Answer:

See below.

Explanation:

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To calculate the NPV we discount the cash flows.

12% annuity factor for 5 years = 3.6048

PV of cash flows = 49,900*3.6048 = $179,879.52

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Hope that helps.

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Answer:    

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Explanation:

Some ways you can help the economy are

1. Lower interest rates – reduce cost of borrowing and increase consumer spending and investment.

2. Increased real wages – if nominal wages grow above inflation.

3. Higher global growth – leading to increased export spending.

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