A product sells for $205 per unit, and its variable costs are 60% of sales. The fixed costs are $464,000. What is the break-even
1 answer:
Answer: $1,160,000
Explanation: The Break even point depicts the amount of sales by making which the company will be at no profit or no loss situation. It can be computed using following formula :-
where,
contribution margin = 1 - variable cost ratio
= 1 - 0.6
= 0.4
so, putting the values into equation we get :-
= $1,160,000
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Answer:
The bid amount should be $13,200,264.
Explanation:
An oil and gas producing company owns 42,000 acres of land in a southeastern state.
It operates 630 wells which produce 18,000 barrels of oil per year and 1.7 million cubic feet of natural gas per year.
The revenue from the oil is $1,800,000 per year and for natural gas the annual revenue is $581,000 per year.
Total Annual Revenue
= Revenue from oil + Revenue from gas
= $1,800,000 + $581,000
= $2,381,000
The bid amount should be the present worth of total annual revenue.
Present Worth of total annual revenue
=
=
=
=
=
=
= $13,200,264